Wall Street rises after Powell comments – 2023-02-01 22:50

Federal Reserve Chairman Jerome Powell held a news conference after the Fed announced a 25 basis point rate hike in Washington.

By Stephen Culp and Sinéad Carew

NEW YORK (Reuters) – The New York Stock Exchange closed higher on Wednesday, as the U.S. Federal Reserve noted a slowdown in its more dovish monetary policy in the fight against inflation, as it raised interest rates by 25 basis points, as expected.

The Dow Jones Industrial Average rose 0.02%, or 6.92 points, to 34,092.96.

The broader S&P 500 index rose 42.61 points, or 1.05%, to 4,119.21.

The Nasdaq Composite rose 231.77 points (2.00%) to 11,816.32.

Although they fell after the Fed’s news and then saw some volatility, the major indexes ended up with a speech from the U.S. central bank chief.

At the news conference, Jerome Powell noted that inflation was starting to recede, but also said he expected further rate hikes.

Investors were particularly relieved after being asked about easing financial conditions, commented Angelo Kourkafas, strategist at Edward Jones in St. Louis.

“(Jerome Powell) had the opportunity to send a conservative message, but he didn’t. He could have said the market was too happy, but he didn’t. Instead, he said there had been clear tightening,” he said.

The Fed’s decision to raise interest rates by 25 basis points is widely expected after a year marked by a string of big rate hikes in 2022, aimed at reining in soaring inflation.

Of the major S&P 500 sectors, only energy closed lower (-1.9%), while technology posted the biggest gain (+2.3%).

Recent economic data has suggested that inflation is losing steam, while the Federal Reserve is also considering data on labor market conditions to adjust its policy.

Wall Street is off to a strong start to the year, with the S&P 500 and Dow posting their first gains since 2019 in January.

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(French version by Jean Terzian)

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