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U.S. stocks are rising on hopes the Fed is headed for a pause

AuthorLiz Moyer
Published 03/23/2023, 10:07 AM
Updated 03/23/2023, 11:44 AM
© Reuters.

By Liz Moyer

Investing.com -- U.S. stocks were rising after the Federal Reserve suggested it was nearing the end of its interest rate hikes.

At 11:42 ET (15:42 GMT) the Dow Jones Industrial Average was up 417 points or 1.3%, while the S&P 500 was up 1.6% and the NASDAQ Composite was up 2.2%.

On Wednesday, the Fed raised rates by the expected quarter of a percentage point, and said in its policy statement that ongoing increases are no longer likely to be appropriate. Its forecast for the terminal rate ending at 5.1% suggests just one more rate hike this year.

The end of the tightening is being greeted with relief, though the Fed also said the recent turmoil in the banking sector could lead to a pullback in credit, and that could have economic effects, as well.

Thursday’s rebound in stocks comes after the Dow fell more than 500 points on Wednesday. Fed Chair Jerome Powell has a tightrope to walk, balancing the need to fight inflation with the need to maintain stability in the financial system. Rising rates are pressuring banks, especially regional lenders, after the sudden collapse of Silicon Valley Bank and Signature Bank earlier this month.

Futures markets are now starting to place bets on the Fed to pivot and cut rates, perhaps as early as June, while Powell said the Fed wasn’t forecasting a rate cut this year. For the next meeting in May, futures traders have split their bets on a pause and another quarter-point rate hike.

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In economic data, initial jobless claims showed a still-strong labor market, falling to 191,000 last week compared with expectations for 197,000. And February new home sales rose 1.1% to an annual 640,000 versus estimates for 650,000.

Coinbase Global Inc (NASDAQ:COIN) shares fell 12% after it said the Securities and Exchange Commission sent it a notice of a possible enforcement action. 

Regeneron Pharmaceuticals Inc (NASDAQ:REGN) rose 6.8% after positive results from a test of its asthma drug Dupixent on lung disease.

Oil rose. Crude Oil WTI Futures were up 0.6% to $71.27 a barrel while Brent Oil Futures crude rose 0.6% to $77.11 a barrel. Gold Futures rose 2% to $1989.

Latest comments

Reuters the king of Fake news and twisting the  facts.... reminds me of 3rd world countries manipulating their people with whatever they want them to think. this is the regime our fore fathers  warned us about. Don't believe a thing that venom's out of their mouths
Should be Stocks are rising on hopes the investors is headed for a manipulative deceptive scam by the sock puppet analysts
hello
Hard landing. The Fed creates bubbles and hard landings. In my 30+ years investing I've never seen the Fed orchestrate a soft landing. Don't take Powell at face value, the banks are not healthy and the easing is coming in the 2nd half of 2023 if not sooner. This guy is clueless, very out of touch with reality.
Honestly? Stocks rise as stocks rise due to rising stocks.
advice to my friends, get rid immediately of everything related to the dollar (stocks, bonds, etc.), the dollar is finished, it is a paper currency with a cheap photocopy, keep your money, my friends, in physical metal (not on paper) gold, silver, copper, etc.
Powell specifically said they aren't going to pause and rates will keep going up and stay high for the foreseeable future
  SVB & Signature banks each had $110-210 billion in assets.  "Experts say Congress opened the door to such problems five years ago when it loosened parts of Dodd-Frank, which among other changes forced the nation's biggest banks to adopt safer lending and investing practices. Under that law, banks with more than $50 billion in assets became subject to stringent requirements including a stress test, which examines whether a bank has enough capital to survive when financial conditions sour.  The 2018 law blunting Dodd-Frank lifted that threshold from $50 billion in assets to $250 billion. That meant SVB, with just over $200 billion in assets, didn't have to undergo a stress test."  --  www.cbsnews.com/news/too-big-to-fail-banks-2008-financial-crisis-credit-suisse-silicon-valley-bank/
nothing to do with what happened 5 years ago, it was the 15th biggest bank in the US, very poor risk assessment and oversight by the Fed. Powell said it was healthy, 2 days later it was in receivership. Barney Frank's bank failed 🤣 How? The king of regulation couldn't regulate???
  Maybe it's tldr. Let me cut it down further for you:  "The 2018 law blunting Dodd-Frank lifted that threshold from $50 billion in assets to $250 billion. That meant SVB, with just over $200 billion in assets, didn't have to undergo a stress test."
Market bankrupts
This is nothing more than a head fake, all of the banks are selling off at their 10 dma and many banks are trading at < $0.80 on the dollar. Big write-offs coming 03/31 and plenty more bank failures. The Fed has been consistently wrong and got it wrong yesterday too. Quantitative easing very soon...
The US Ponzi Scheme is a JOKE.
Bancks are in this situation because they didn't believe that the interest rates will reach that high... And guess what, companies didn't either. So we can see a sudden spike in unemployment rates soon.
Why sudden and not gradual?
wow discounting a thing which may or may not dependent on data...n ignoring real hardened interest rates
the're those posters that "think" there are simplistic, simple minded solutions to America's economic problems...
Pixie dust is a large part of the FED solutions
Stock markets are a distraction and a farce..For real answers on where we are going look no further than the bond markets and Gold
That's it! Raise interest rates, bail out the banks, raise the debt ceiling, and continue to send billions to Ukraine. Nothing to see here. All is well.
Will usd become down?? Will it effect to all currency trades?
yes.....
dol,lar value effects all currency markets...but it's technical signals are mixed right now it is trying to find a direction...I'm waiting for the dollar to signal what itt wants to do....
Looks banks borrowed money from FED with 5% interest and put into stock market for quick profit. But if market crash, those banks have to bankrupt?
most uninformed remark so far. 🤣
That's right. Use the FED backstop cash, invest it in the market to drive up stocks, short it then pull out. No other explanation makes sense! There are still massive problems in the banking sector and economy so what else can be driving up markets?
we will just bail them out again and again using tax payer money. capitalism!
more predictable volatility in these markets... a high is expected by the end of the first week in April......
I think I finally understand the US stock investor. If things get bad enough, this year next year has to be better.
Buy the dip!
fred stop trying to "understand" the market ...it will hand you your head trading it with that attitude.... market volatility rises and falls on precieved risk...this is a bear market ...bear markets are the most volatile.
Five percent in treasuries is fine for me, but thanks for your advice.
looming bank crisis, falling dollar and labor strikes are worth 15 percent to the upside.
Oh pricing in “pivot” for the 40th time in 2023? How suprising! Forget the FED chair has continuously said the opposite as recent as yesterday. Surely he was just joking. Depends on the definition of “is” is. It would be laughable if they were criminally defiling the American so blantantly in broad daylight. Assume the proper postion America as this JOKE of “market” laughs in your face while sticking the knife in your back. Predictably fraudulent, JOKE!
Assuming you're not Mitch, try posting something original.
hes my Dad
  My condolences.
All loses evaporated and nothing fixed. Got it!
So tired of these articles. Listen to powell and what he says and thats all you need to know. This “hope” and “expectations” is all bs
The rise is because the FR is pumping money into markets through their banks>brokers.
Massive bubble will eventuality burst. There's no other option
If it doesn't burst, we just stop calling it a bubble.
it will
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