Benchmarks Surge as Federal Reserve Turns Hawkish

The central bank predicted three interest rate hikes in 2022

Digital Content Manager
Dec 15, 2021 at 4:25 PM
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All three major benchmarks clawed back into positive territory on Wednesday, after the Federal Reserve announced it would accelerate the tapering timeline of its bond-buying program, at a much more aggressive pace than some anticipated. This news followed several high inflation readings, including worse-than-expected retail sales data for November. Specifically, the central bank said it will buy $30 billion less in bonds in January than it did in December, and added it expects up to three interest rate hikes in 2022.

Fed Chair Jerome Powell noted in a news conference that while the labor market has not yet fully recovered, it was time to roll back some pandemic-era policies. In response, the Dow added more than 383 points, despite being down triple digits at its session lows. Elsewhere, the tech-heavy Nasdaq and S&P 500 both logged solid wins of their own.

Continue reading for more on today's market, including:

  • This auto giant is gearing up for a production boost.
  • Analyst sees tailwinds fading for Domino's Pizza stock.
  • Plus, shipping name scores bull note; Tesla stock eyes key trendline; checking in with ADBE ahead of earnings.

The Dow Jones Average (DJI - 35,927.43) added 383.3 points, or 1.1% for the day. Cisco Systems (CSCO) led the gainers, adding 3.7%, while Nike (NKE) paced the laggards with a 0.9% fall.

The S&P 500 Index (SPX - 4,709.85) rose 75.8 points, or 1.6% for the day. Meanwhile, the Nasdaq Composite (IXIC - 15,565.58) jumped 327.9 points, or 2.2% for the day.

Lastly, the CBOE Volatility Index (VIX - 19.29) shed 2.6 points, or 11.9% for the day.

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  1. The United Kingdom hit a new record of daily Covid-19 infections today, with 78,610 cases reported in the last 24 hours, up from 59,610 cases the day prior. (CNBC)
  2. Cornell University has partially shut down after reporting more than 900 active Covid-19 infections, many of which are omicron variant cases in fully vaccinated individuals. (MarketWatch) 
  3. Which shipping name bagged a Citigroup bull note today.
  4. 1 electric vehicle (EV) maker could surge after pulling back to this key trendline.
  5. Adobe stock brushed off some bearish attention ahead of earnings.

There were no earnings of note today.

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Gold Loses Luster as U.S. Dollar Strengthens 

Oil prices settled higher on Wednesday, after the Federal Reserve said it planned on three interest rate hikes in 2022. This helped investors brush off concerns related to the Covid-19 omicron variant, and the impact it could have on energy demand. In response, January-dated crude added 14 cents, or 0.2%, to finish at $70.87 per barrel.

Gold prices were lower, on the other hand, as investors digested news of the accelerated economic stimulus tapering. The announcement boosted the U.S. dollar, while the yellow metal suffered. February-dated gold fell $7.80, or 0.4%, to close at $1,764.50 per ounce.

 

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