Stocks reversed losses and climbed higher on Wednesday after the Federal Reserve signaled a more aggressive approach to its monetary policy heading into the new year. Both the Dow Jones Industrial Average and Nasdaq jumped over 300 points while the S&P 500 rose over 1.6%.
Here's how the market settled on Wednesday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
Federal Reserve turns hawkish amid red hot inflation:
The Federal Reserve signalled on Wednesday that it's easy monetary policy in response to the coronavirus pandemic's economic impact is coming to an end as the central bank works to counter red hot inflation.
At the conclusion of its December Federal Open Market Committee meeting, policymakers said the Fed will accelerate the reduction of its monthly bond purchases, now buying $60 million of bonds each month starting in January. That level is half the level prior to November's taper and $30 billion less than the central bank had been buying in December.
Then, after the Fed's bond tapering ends, either in late winter or early spring, the central bank expects to start increasing interest rates. The Fed sees as many as three rate hikes in 2022, then two in 2023, and two more in 2024, according to projections released Wednesday.
"Economic developments and changes in the outlook warrant this evolution of monetary policy, which will continue to provide appropriate support for the economy," Chairman Jerome Powell said at a post-meeting news conference Wednesday.
November retail sales post slower-than-expected increase:
U.S. retail sales increased at a slower-than-expected rate in November after jumping in October, as holiday-related shopping dropped during the month despite retailer deals.
Retail sales were up 0.3% in November compared to October, the Commerce Department posted in its report published Wednesday, coming in below the 0.8% increase expected by consensus economists. October sales were upwardly revised to a rise of 1.8% from the 1.7% increase previously reported.
By category, department sales declined by 5.4%, with the holiday-related category taking one of the biggest sales drops of the month. Moreover, general merchandise store sales fell by 1.2%, electronics and appliance store sales dropped by 4.6%, and health and personal care store sales slipping by 0.6%.
Here's how market benchmarks started trading soon after opening bell:
S&P 500 Index: +0.09% or +4.04 points to 4,638.13
Dow Jones Industrial Average: +0.01% or +1.87 points to 35,546.05
Nasdaq Composite Index: -0.04% or -5.75 points to 15,919.00
