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Stock Market Today: Dow Soars as Powell Shoots Down Aggressive Fed Hike Bets

Stock Markets May 04, 2022 04:08PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com – The Dow rallied Wednesday, as Federal Reserve lifted interest rates for the second time this year, but Chairman Jerome Powell cooled fears of more aggressive rate hikes at upcoming meetings.

The Dow Jones Industrial Average gained 2.8%, or 932 points, the S&P 500 rose about 4%, the the Nasdaq surged 3.2%.

Tech rallied, led by Apple (NASDAQ:AAPL), which was given a boost as Treasury yields dropped after Powell said the Fed was "not actively considering" a 75 basis point rate hike in the coming months, though added that 50 basis points hikes were on the table at the "next couple of meetings."

The sector had struggled for direction ahead of the Fed chief's remarks after it delivered a widely expected 50 basis points rate hike and said it would get its balance sheet reduction program underway in June. 

"In support of these goals, the Committee decided to raise the target range for the federal funds rate to 3/4 to 1 percent and anticipates that ongoing increases in the target range will be appropriate," the Fed said in a statement. 

Advanced Micro Devices (NASDAQ:AMD) was a notable outperformer, rising more 9% after the chipmaker upgraded its full-year guidance after delivering a first-quarter beat on both the top and bottom lines.

“We'd note that this positive view comes despite AMD explicitly assuming a more pessimistic backdrop for PCs with overall market shipments now expected to dip 9%,” Wedbush said in a note.

On the earnings front, Lyft , Uber and Starbucks were among the names making headlines.

LYFT (NASDAQ:LYFT) fell nearly 30% after the ride hailing company delivered softer guidance for the second quarter after reporting mixed first quarter results. The softer guidance was attributed to higher costs as Lyft said it would have to ramp-up spending to attract new drivers.

Uber Technologies (NYSE:UBER) delivered better-than-expected results, but fell more than 4% after flagging a $5.9 billion hit from losses on investments in Grab, Aurora, and Didi.

Starbucks (NASDAQ:SBUX), however, climbed more than 9% after the coffee chain reported a first-quarter results that topped analysts’ estimates, supported by strength in domestic same store sales.

Energy underpinned the intraday rebound as oil prices on fresh fears of supply disruptions after the European Union laid out plans to phase out imports of Russian oil.

Stock Market Today: Dow Soars as Powell Shoots Down Aggressive Fed Hike Bets
 

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Comments (26)
Parveen Tiwari
Parveen Tiwari May 04, 2022 9:07PM ET
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This is something to laugh at only seeing the commodity inflation only shooting up
Mart Bab
Rubberduck1973 May 04, 2022 8:49PM ET
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I though the fed was going to shoot down inflation. So now they are shooting themself? What a joke. Very soon fed shoots down shooting down aggressive rate hikes
Stan Smith
Stan Smith May 04, 2022 7:59PM ET
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This makes no sense at all. Inflation is still here and only getting worse but the FED being less aggressive in the future (not the present) is great for stocks?
Gregory Agreda
GregAgreda07 May 04, 2022 7:59PM ET
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Quite astonishing, I don’t understand…
Rob Fordham
Rob Fordham May 04, 2022 7:59PM ET
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Fed can rasie interst rates to the moon and it wont fix suppy chain issusse. That takes time. Raising too fast will only hurt supply chain more and increse inflatiin more. Fed is correct to be careful
Matt Brackley
Matt Brackley May 04, 2022 7:59PM ET
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The feds job is to keep you a slave. Make sense now?
Stan Smith
Stan Smith May 04, 2022 7:59PM ET
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Rob Fordham  It can't raise interest rates to the moon.. there is far too much sovereign and consumer debt. No one is talking about the looming mortgage crisis either because of increased rates. This is more about the FED increasing the currency/credit supply that has directly created the inflation...supply chain problems are a bit of a cop out. Canada produces a lot of goods in house but prices are still increasing on those items in the absence of supply chain issues
Karl Kessler
Karl Kessler May 04, 2022 7:59PM ET
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Rob Fordham The Fed is keeping supply chains from being fixed. The Fed is anesthetic. Pain is what makes change.
William Bailey
William Bailey May 04, 2022 7:08PM ET
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Hahaha , dead cat
Rob Fordham
Rob Fordham May 04, 2022 7:08PM ET
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Tradable bounce to 4400
CHAITANYA PAUL
CHAITANYA PAUL May 04, 2022 7:06PM ET
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when fed next meeting?
Bruh Boy
Bruh Boy May 04, 2022 6:41PM ET
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American market is ridiculous, if they were nuked first it would go up 10% and then to 0.
Millennial Stacker
Millennial Stacker May 04, 2022 6:06PM ET
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Zoom out to the max chart. Anyone buying US stocks right now is like buying Japanese stocks in 1989. Good luck.
Klaus Mittwoch
Klaus Mittwoch May 04, 2022 6:04PM ET
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Do you expect double digits inflation in next months?
Anthony Doan
Anthony Doan May 04, 2022 5:57PM ET
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He"s at least a year late.
Ricardo Diogo
Rcd72 May 04, 2022 5:40PM ET
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Powell is a scam... bla Bla Bla bla
 
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