What The Fed Rate Hike Means For The Markets And Investors

What The Fed Rate Hike Means For The Markets And Investors

The Federal Reserve announced this week that it's raising rates by 50 basis points. The Fed raised its main interest rate by half a percentage point for the first time in over two decades. And, while a raise in rates is not usually cause for celebration, Wall Street rallied immediately following the news—just before sliding down a slippery slope and falling once again. Download Q. ai for iOS today for more great Q. ai content and access to over a dozen AI-powered investment strategies. Start with just $100. No fees or commissions. Chairman Jerome Powell's comments were a culprit in causing the initial climb, having noted that the Fed wasn't considering raising rates by 75 basis points in future months. After all, investor concerns surrounded the central bank potentially raising rates by an even bigger increase of three-quarters of a percentage point during this FOMC meeting. Shortly after Powell downplayed the likelihood of an even greater jump, the Dow and S&P 500 ticked up to their highs of the day. On Wednesday, the S&P 500 jumped about 3%, posting its best day in nearly two years. The Dow was up 2. 8%, and the Nasdaq Composite was up 3. 2%.