By Yasin Ebrahim
Investing.com -- The S&P 500 staged a rebound Wednesday, after shrugging off the Federal Reverse widely expected quarter-point rate hike as Chairman Jerome Powell didn't push back, as many had feared, on the recent rally in stocks and easing financial conditions.
The S&P 500 rose 1.7%. The Dow Jones Industrial Average gained 0.6%, or 196 points, and the Nasdaq Composite rose 2.6%.
The Fed downshifted to a 0.25% hike on Wednesday from a 0.5% in December, and suggested more hikes were ahead, but Powell didn't push back as much as expected against the recent easing in financial conditions.
"Our focus is not on short term moves, but on sustained changes to broader financial conditions," the Fed chief said.
“Without a substantial reduction in labor demand, the Fed will not be comfortable pausing, let alone cutting rates,” Jefferies said in a note.
Treasury yields slipped further into the red, helping technology catch a bid ahead of quarterly results from Meta Platforms (NASDAQ:META) due after U.S. markets close.
Rising semiconductors played a role in boosting tech, driven by 13% surge in Advanced Micro Devices (NASDAQ:AMD) as chipmaker reported better-than-expected results.
Sentiment on the chipmaker is expected to face headwinds from a competitive landscape in PC and a correction in data center, {{|0 Goldman Sachs (NYSE:GS) said}}, though remains constructive on the stock.
“[W]e remain constructive on the stock given our expectation for significant market share expansion in server CPU and the potential for margin improvement in 2H23/2024 driven by higher volumes and better mix vs. 1H23 - both idiosyncratic in nature,” it added.
Snap (NYSE:SNAP), meanwhile, fell 10% after the social media firm refrained from providing guidance after reporting mixed quarterly results as revenue fell short of Wall Street expectations amid softer backdrop for advertising.
Energy was the only sector in the red, falling more than 2% as oil prices fell after U.S. weekly crude stockpiles increased more than expected and OPEC and its allies stuck with their output policy unchanged.
APA Corporation (NASDAQ:APA), Hess Corporation (NYSE:HES) and EOG Resources Inc (NYSE:EOG) were among the biggest decliners,
Elsewhere on the earnings front, Peloton Interactive Inc (NASDAQ:PTON) rallied 27% after it reported quarterly results that were less bad than feared, underpinned by rebound in subscription revenue.
Electronic Arts (NASDAQ:EA), meanwhile, after earnings net bookings fell short of analysts’ estimates as demand continues to take hit from weakening consumer.
“Consumer spending patterns appear to be weakening, which is weighing on EA's live services business and impacting the performance of new game releases,” Deutsche Bank said in a note.