Nasdaq, S&P, Dow continue to seesaw after Fed hikes rates by 25 bps as expected
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U.S. stocks on Wednesday fluctuated in typical volatile trade after the Federal Reserve hiked interest rates by 25 basis points as widely expected.
The tech-heavy Nasdaq Composite (COMP.IND) was up 0.46% to 12,136.57 points, minutes after the central bank released its monetary policy statement. The benchmark S&P 500 (SP500) was higher by 0.26% to 4,131.50 points, while the blue-chip Dow (DJI) added 0.06% to 33,728.62 points.
Treasury yields also did not show much reaction after the statement. The 10-year yield (US10Y) was now down 5 basis points to 3.39% and the more rate-sensitive 2-year yield (US2Y) was down 5 basis points to 3.93%. Shorter-end maturities continued to see selling amid the debt-ceiling debate, with the 1-month yield (US1M) up 7 basis points to 4.44%.
Of the 11 S&P sectors, nine were trading in the green, led by Utilities and Real Estate.
Energy topped the losers for a second straight day, as crude oil futures extended their decline to below $70. The sector had suffered solid losses in the previous session amid disappointing economic data out of China and jitters around the regional banking space at home.
The Fed's statement also softened somewhat from March, indicating that the central bank may pause rate hikes at the next meeting in June.
"No explicit promise of a pause in the Fed's statement, but the change in language suggests May's rate hike may be the last one for the foreseeable future," said Ksenia Potapov, economist at First American.
Investors now look ahead to Fed chief Jerome Powell's press conference at 1430 ET.
Wednesday's economic calendar saw some more data on the labor market coming in ahead of the Fed decision time, with ADP's measure of private payrolls in April showing a 296K increase versus a predicted rise of 148K jobs.
Additionally, ISM services PMI for April rose slightly above expectations while S&P's gauge of U.S. composite PMI for April came largely in-line.
Earnings news continued to remain in the spotlight. Advanced Micro Devices (AMD) slumped more than 7% and was among the top percentage losers on the Nasdaq Composite (COMP.IND) as Wall Street reacted negatively to the semiconductor company's guidance.
Starbucks (SBUX) was also among the top Nasdaq percentage losers after some investors were disappointed with the coffee giant's outlook.