Dow Jones Holds Gain After Fed Decision To Raise Rates; Nasdaq Leads Upside

The Dow Jones Industrial Average briefly reversed lower before turning positive again as the stock market reacted to the Fed’s decision to raise interest rates for the first time since 2018.

X

The Nasdaq composite and the S&P 500 also traded off session highs but held onto gains.

The decision to raise interest rates by 25 basis points was in line with economists’ expectations. As of now, the Fed anticipates six more rate hikes in 2022 to counteract high inflation. However, new risks to economic growth in the U.S. may prevent the Fed from raising rates as quickly as originally expected.

The Financial Select SPDR ETF (XLF) was among the few S&P 500 sectors holding onto gains in afternoon trading, up over 1%. The index traded as much as 2.5% higher in today’s session. Meanwhile, the utilities and energy sectors led the downside with losses of over 1% each. The Energy Select SDPR ETF (XLE) lost roughly 3.8% and remains down more than 7% for the week.

U.S. crude oil futures continued lower to $94.66 a barrel, down roughly 1.8% on Wednesday after falling back below $100 a barrel earlier this week. Oil has plunged nearly 30% from its high above $130 on March 7.

Dow Jones In The Stock Market Today

About an hour before the close, the Dow Jones industrials held a gain of 0.4% while the Nasdaq gained over 2.2%. The S&P 500 advanced 1% and the Russell 2000 traded 2% higher. Early data showed volume was running higher on the Nasdaq and on the NYSE vs. the same time on Tuesday.

The Nasdaq was swiftly turned away at its 21-day exponential moving average as it traded near intraday lows. The S&P 500 and Dow Jones industrials also faded back below their 21-day lines after briefly crossing above these areas on Wednesday. The S&P and Dow still remain above their lows from Feb. 24, which serves as an important area of support for now.

Meanwhile, the 10-year Treasury yield extended gains after the Fed decision to around 2.21%, rising another 5 basis points. The yield on the benchmark U.S. government bond has soared 46 basis points over the past seven sessions, not including today.

Dow Jones stocks outperforming on Wednesday included financial stocks JPMorgan (JPM) and Goldman Sachs (GS), up over 3% and 2%, respectively. Shares of JPMorgan moved closer to reclaiming its 21-day line, while Goldman Sachs reclaimed this line after gapping up. Nike (NKE) stock also outperformed, rallying more than 3% ahead of next week’s earnings report.

On the downside, Walgreens (WBA) and Johnson & Johnson (JNJ) fell over 2% and 1%, respectively.

IBD 50 Stocks: Health Care Leaders Near Buy Points

The Innovator IBD 50 ETF (FFTY) rose 1.2% and continued to regain some of its recent losses. Alpha & Omega Semiconductor (AOSL) and breakout stock J.B. Hunt (JBHT) helped lead the index.

J.B. Hunt rose over 8% on Wednesday as shares soared in heavy volume. The stock remains in buy range from a proper entry of 208.97. The trucking industry group, of which J.B. Hunt is a part, was among top performers, up around 4% on Wednesday. Several computer software industry groups also outperformed, along with a few semiconductor-related groups.

Several beaten down technology stocks in the Nasdaq 100 like Atlassian (TEAM), Datadog (DDOG), DocuSign (DOCU) and Zoom Video (ZM) also showed gains of at least 6%.

Elsewhere, IBD 50 stock Costco (COST) declined roughly 1% after briefly scoring a breakout earlier today. Shares rose above a 545.39 buy point of a cup-with-handle base.

IBD 50 stock UnitedHealth Group (UNH) also traded inside a buy zone. The stock also declined 1% on Wednesday and traded below its 501.03 buy point of a double-bottom base in afternoon trading.

Follow Rachel Fox on Twitter at @IBD_RFox for more Dow Jones and stock market commentary.

YOU MIGHT ALSO LIKE:

IBD’s Market Outlook: A Guide To The Different Designations

Get Free IBD Newsletters: Market Prep | Tech Report | How To Invest

What Is CAN SLIM? If You Want To Find Winning Stocks, Better Know It

The post Dow Jones Holds Gain After Fed Decision To Raise Rates; Nasdaq Leads Upside appeared first on Investor’s Business Daily.