Fed Signal Spurs Rally at US Stock Markets

Following an eagerly anticipated monetary policy announcement from the Federal Reserve, the stock markets in the United States experienced a noticeable uptick. Contrary to some speculations, the US benchmark interest rates remained at their current level, and explicit indications of an imminent rate cut were absent. Investors, who may have braced for stricter monetary measures after remarks by Fed Chairman Jerome Powell, were able to breathe a sigh of relief. The Dow Jones Industrial Average finished the trading day up 0.64 percent, while the broader S&P 100 improved by 0.20 percent, and the tech-heavy Nasdaq 100 limited its loss to 0.17 percent. However, market observers cautioned against the reduced trading volume due to holidays in Asia and Europe, which could lead to disproportionate movements in prices. Even though the inflation figures in the USA have fallen over the past year, they remain at a level that continues to sound the alarm bells at the central bank. Therefore, no reduction in benchmark interest rates is foreseen as long as the inflation rate does not consistently approach the target value of two percent. This information curbed expectations of an imminent adjustment in interest rates, which had already been dampened by the robust economic condition of the USA. Individual companies contributed significantly to the positive development of the Dow Jones. Shares of Microsoft and Amazon saw an increase of about 1.5 percent. Johnson & Johnson enjoyed a particularly sharp rise in share price by 4.5 percent. Additionally, Boeing and 3M stood out with gains of 1.6 and 2.5 percent, respectively. Amazon had just recently reported impressive quarterly figures, mainly due to strong revenue growth in its cloud segment AWS, while more subdued sales expectations took a back seat. As for Johnson & Johnson, the focus was on ongoing disputes about the company’s talc-based baby powder, which they are seeking to settle with a higher offer. Regarding innovation, Microsoft underscored its commitment to sustainable energy in partnership with Brookfield Asset Management through a record-breaking clean energy purchase agreement. Boeing also marked a milestone by preparing its space taxi to transport astronauts into space after delays and testing mishaps. Meanwhile, a positive rating from JPMorgan gave 3M a boost. In the S&P 100, individual firms also stood in the spotlight: Pfizer and Dupont enjoyed strong demand with gains of over six percent. Pfizer impressed with high revenues from its COVID-19 medication Paxlovid and efficiency improvements, while Dupont raised its annual forecast following outstanding results. A noteworthy mention is also the year’s largest IPO in the USA, Viking Holdings, whose shares recorded slight gains after the debut.