STORY: U.S. stocks had their best day since May of 2020, staging a late rally Wednesday after the Federal Reserve announced its widely expected 50-basis-point interest-rate increase, the biggest rate hike in 22 years.
The Dow ended more than 900 points higher to close up 2.81%. The S&P 500 finished up 2.99%, while the Nasdaq gained more than 3.19%.
The indexes soared after Fed Chair Jerome Powell said the central bank was not considering a rate hike bigger than half a percentage point in its effort to bring down decades-high inflation.
Concerns about a more aggressive Fed, mixed earnings and geopolitical risks have hammered Wall Street in recent days, with highly valued growth stocks bearing the brunt of the sell-off.
But on Wednesday, high-growth tech stocks soared, with Apple, Tesla and Facebook parent Meta Platforms all posting big one-day gains.
Bank stocks also rose after U.S. Treasury two-year yields, the most sensitive to the Fed's interest rate outlook, soared to their highest level since November 2018.
Jim Bruderman is vice chairman of 1879 Advisors said the Fed should be able to tackle inflation without doing too much economic harm.
“Quite frankly, we are not convinced that there will be a recession. In fact, we think a soft landing is the highest probability right now. And we think odds of a recession, if there is one at all, or maybe late 2023. But if the Fed can orchestrate a soft landing, then odds are that maybe we don't see a recession at all and it's back to the races sometime later this year or early next.”
Other stocks on the move Wednesday:
Starbucks jumped almost 10% after the coffee chain saw quarterly comparable sales grow 12% in North America.
Lyft shares fell a whopping 29.91% a day after the ride-hailing company reported results that sparked concerns about ridership and bigger spending to attract drivers.
That cast a pall over earnings on Wednesday from Uber, which sought to set itself apart from Lyft, saying it didn't need to boost incentives to lure more drivers and forecast a strong second quarter.
Still, Uber ended 4.65% lower on the day.