Home > Market update: Wall Street rallies after Fed decision on taper program

Market update: Wall Street rallies after Fed decision on taper program

  • The Dow Jones, S&P 500 and Nasdaq all closed in the green after reversing earlier losses, with stocks moving sharply higher in the afternoon session.

Stocks rallied on Wednesday as the Fed announced its tapering program will now consist of $30 billion monthly decreases, with the purchases likely to end by March. The Fed’s latest dot plot update suggests three interest rate hikes in 2022, with projections for 2023 putting it at four and then two the year after.

After the Fed’s surprise, the Dow Jones quickly moved up to close 1.1%, with the Nasdaq composite rallying to 2.2% and the S&P 500 seeing more than 1.6% in an uptick that saw several major stocks close higher to reverse some of the losses seen on Tuesday.

Sector performance

Consumer Durables saw the most gains across the sectors with +18.1%. Stocks in the Electronic Technology sector rallied a cumulative 14%, while another double-digit performance was seen in the Energy minerals sector with close to +12% in upside action.

There were also decent gains for Healthcare and Transportation stocks, up 9% and 8% respectively at close on Wednesday. For the latter, the upside came despite concerns over potential disruptions to travel given the surge in Omicron cases in the US and across Europe.

European stocks open higher

Gains on Wall Street followed the FTSE 100’s dump as the UK inflation grew at its fastest rate in a decade. As the FTSE 100 slipped 0.7%, the pan-European Stoxx 600 closed largely unchanged, but both opened higher on Thursday at 1.1% and 1.4% respectively.

Markets across the eurozone are also climbing in the morning session as investors eye monetary policy decisions from the Bank of England and the European Central Bank.

Gold and oil climb as Bitcoin looks to reclaim $50,000

Elsewhere in the market, oil rose 1.2% to $71.64 per barrel, while spot gold added nearly 1.3% as it soared to $1,786.60 per ounce and silver rose 2.9% to $22.18.

Meanwhile, the 10-year Treasury yield jumped 2.5 bps to 1.46% though it remained below recent highs above 2.0%

In cryptocurrencies, Bitcoin climbed to intraday highs of $49,421 on Wednesday before trading lower amid slight sell-off pressure. The cryptocurrency remains wedged below $50,000 but could test the resistance level if fresh buying momentum hits the market. Currently, BTC trades around $48,870 against the US dollar.

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