The Dow Jones Industrial Average rallied after Federal Reserve Chairman Jerome Powell hiked interest rates amid spiraling inflation. Oil stocks dipped after President Joe Biden warned he would exercise emergency powers if oil companies do not increase output. Leaderboard stock World Wrestling Entertainment (WWE) eyed a buy point. Microsoft (MSFT) was a top blue chip.
Volume was lower on both the Nasdaq and the New York Stock Exchange compared to the same time Tuesday. But volume may accelerate following the Fed’s news.
Meanwhile, the yield on the benchmark 10-year Treasury note slid nine basis points to 3.39%. West Texas Intermediate crude fell more than 2% to trade at just over $116 per barrel.
Fed Chair Powell Hikes Rates As Inflation Spirals
Fed officials decided to raise to interest rates by 0.75%, the biggest hike in nearly 30 years. This raises the benchmark federal funds rate to a target between 1.5% and 1.75%.
In addition, all 18 of the senior bankers at the meeting expect the Fed to raise rates to at least 3% this year.
Fed Chair Powell conceded at the post-meeting press conference that the hike was an “unusually large one.”
“From the perspective of today, either a 50 basis point or a 75 basis point increase seems most likely at our next meeting,” Powell said.
He also thinks that ongoing rate increases “will be appropriate.”
Powell said the pace of future rises will continue to be data driven.
Nasdaq Surges; Small Caps Gain
The Nasdaq surged more than 2% higher. MercadoLibre (MELI) was among the best performers as it surged more than 8%.
The S&P 500 was up more than 1%. Netflix (NFLX) stood out here with a gain of around 7%.
The S&P 500 sectors were mostly positive. Technology and consumer discretionary were among the best performers. Energy and materials were the only losers.
Small caps were also surging, with the Russell 2000 up about 2%.
The Innovator IBD 50 ETF (FFTY), a bellwether for growth stocks, rose around 0.6%.
Dow Jones Today: Boeing, Microsoft Stock Lead
The Dow Jones Industrial Average moved higher despite the Fed announcement. It was up nearly 1%.
Microsoft stock was one of the best performers on the Dow Jones today as it rose nearly 3%. It remains below its 50-day line, MarketSmith analysis shows.
But it was overshadowed by the performance of Boeing (BA). The aerospace giant soared more than 9%. It remains stuck below its major moving averages.
Dow Inc. (DOW) was among the weakest performers as it dipped nearly 1%.
Oil Stocks Slip As Biden Issues Threat
A number of oil stocks were giving up ground after President Joe Biden warned he may resort to using emergency powers if American oil companies fail to increase output at refineries.
The commander in chief issued the warning to oil firm leaders in a series of letters Wednesday.
Biden has hit out at “historically high profit margins” as citizens suffer amid spiraling fuel prices. He has also blamed the war in Ukraine, dubbing it a “Putin price hike.”
Gas prices currently average at about $5 a gallon in the U.S. Biden has been trying to tackle the problem by releasing million barrels from the U.S. Strategic Oil Reserve.
While the president did not give a a timeline for when he would tap his emergency powers, he said it would happen in the “near term.”
Outside Dow Jones: WWE Stock Eyes Buy Point
World Wrestling Entertainment came close to its entry from an enormous cup-with-handle base. The ideal buy point here is 68.82.
It offers a second bite of the cherry for investors, as it has now moved clear of its buy zone from a 63.81 flat-base entry.
WWE is one of the strongest performers among growth stocks lately. Its bases are first-stage patterns, which means they are more likely to result in rich gains.
The stock got a boost after Morgan Stanley raised its price target to 75 from 60. It also reiterated its equal-weight rating.
WWE stock is a member of the prestigious IBD Leaderboard list.
Meanwhile Resources Connection (RGP) is a possible candidate for your watchlist as it eyes a consolidation entry of 20.26.
The relative strength line is spiking, which is an encouraging sign. It holds a perfect EPS Rating of 99 and 55% of stock is currently held by funds.
Please follow Michael Larkin on Twitter at @IBD_MLarkin for more on growth stocks and analysis.
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