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Stock Market Today: Dow Racks Up Gains After Fed Hikes Rates, Tech Rallies

Stock Markets Jul 27, 2022 04:09PM ET
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By Yasin Ebrahim

Investing.com -- The Dow racked up gains on Wednesday, as Federal Reserve Chairman Jerome Powell signaled that the Fed could slow the pace of rate hikes at some point, while tech rallied after quarterly results from Alphabet and Microsoft weren’t as bad as many had feared.

The Dow Jones Industrial Average gained 1.4%, or 436 points, the Nasdaq was up 4.1%, and the S&P 500 rose 2.5%.

Following the Fed's 0.75% rate hike on Wednesday, Powell teed up the idea of another "unusually large" rate hike in September, but said the Fed could slow the pace of rate hikes to assess the impact on inflation and the economy.

"As the stance of monetary policy tightens further, it likely will become appropriate to slow the pace of increases...while we assess how our cumulative policy adjustments are affecting the economy and inflation," Powell said.

The 2-year Treasury yield, sensitive to Fed rate hikes, fell to session lows following the remarks as investors appeared to be pricing in the prospect of a pause or easing pace of rate hikes.

Tech, meanwhile, added to recent gains following a rally in Alphabet and Microsoft.

Alphabet (NASDAQ:GOOGL) reported earnings and revenue that fell short of estimates, but results were better than feared, driven by strength in its search business, sending its shares more than 7% higher.

“GOOGL's better-than-feared results continued in the face of an uncertain macro with search upside offset by slight YouTube, Cloud & Other revenue softness,” RBC said in a note.

Microsoft (NASDAQ:MSFT) also reported a miss on both the top and bottom lines, driven largely by a stronger dollar and the impact of China lockdowns, Wedbush said, though it added that the tech giant’s growth story remains intact. Its shares were up more than 6%.

Microsoft’s growth story is “cloud and core Azure growth which was healthy this quarter and appears to have momentum into 2023 despite economic headwinds,” Wedbush added.

Semiconductor stocks were also in favor as Texas Instruments' (NASDAQ:TXN) better-than-expected quarterly results and guidance improved sentiment on chip stocks.

NVIDIA (NASDAQ:NVDA), Monolithic Power Systems (NASDAQ:MPWR) and ON Semiconductor Corporation (NASDAQ:ON) were among the biggest gainers.

In other news, PayPal Inc (NASDAQ:PYPL) jumped more than 12% as activist investor Elliott Management reportedly took a stake amid plans to push the company to speed up its cost-cutting efforts.

Stock Market Today: Dow Racks Up Gains After Fed Hikes Rates, Tech Rallies
 

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Comments (10)
Edwin Maberly
Edwin Maberly Jul 27, 2022 9:08PM ET
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Edwin Maberly
Edwin Maberly Jul 27, 2022 9:08PM ET
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error
Erikke Evans
Erikke Jul 27, 2022 8:51PM ET
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Fed rate hike have had zero effect on inflation thus far. Who does Powell think he's kidding. Slowing rate hikes will just put the economy even further behind the curve.
Rich Ash
Rich Ash Jul 27, 2022 8:51PM ET
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You need to wait for it flow through Kermit
Kris Jay
Kris Jay Jul 27, 2022 8:38PM ET
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yea! Fed increased rates to slow the economy down!!  buy, buy buy those stocks! run them up! - retail investors
Hunt Richardson
Hunt Richardson Jul 27, 2022 7:40PM ET
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you authors need to get on the ball about blocking spam which is taking over these message boards!
S S Shet
pingo_0070 Jul 27, 2022 7:28PM ET
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worlds largest financial joke unfolding in the USA ...
Dave Jones
Dave Jones Jul 27, 2022 7:28PM ET
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Mitch? Is that you?
Ric Later
riclater211 Jul 27, 2022 7:11PM ET
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all i know is for people with large sums of cash, it's getting closer to buy up real estate cheap. those poor souls who over spent in the last 3 years are good to feel awfully silly
Tyler Phillis
Tyler Phillis Jul 27, 2022 6:14PM ET
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This is classic expectation management. The retail financial market traders in general go risk off when uncertain and risk on when certain. The pros react to data expectations before the lagging indicators are released. This is why the pros win and retailers lose.
Russell Simmen
Russell Simmen Jul 27, 2022 5:49PM ET
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They are pumping up the price so the retirement accounts buy the stock for top dollar. Thats why you should handle your own 401k and IRAs.
Jack Sailor
Jack Sailor Jul 27, 2022 4:58PM ET
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The Economy is on life support ... up until midterms... Fact ... then it falls apart because there is no reason to not let it drpo
John Niemokta
John Niemokta Jul 27, 2022 4:58PM ET
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I would expect midterms will drive the market up especially with a complete republican blowout. Democrats are getting exactly what they deserve.
Jul 27, 2022 4:52PM ET
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Why dollar up when reta high!
dimpl pi
dimpl pi Jul 27, 2022 4:52PM ET
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i think the basket ahainst dollar is gonna go up
Sriram NP
Sriram NP Jul 27, 2022 4:52PM ET
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correct only no, because folks want to get dollars to get some interest rate based returns
 
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