by Caroline Valetkevitch
NEW YORK, July 27 (Reuters) – The New York Stock Exchange ended sharply higher on Wednesday after the Federal Reserve (Fed) decided to raise interest rates by 75 basis points as expected, comments from the boss of the American central bank having also reassured investors.
The Dow Jones Industrial Average gained 1.37%, or 436.05 points, to 32,197.59 points.
The broader S&P-500 gained 102.56 points, or 2.62%, to 4,023.61 points.
The Nasdaq Composite advanced for its part by 469.85 points (4.06%) to 12,032.42 points.
The main Wall Street indexes were in the green even before the Fed’s statement, buoyed by strong results from Microsoft and Alphabet the day before the close which fueled investor confidence.
The Nasdaq posted its strongest daily percentage gain since April 2020, while the S&P-500 hit a record close since June 8.
During a press conference, the chairman of the Fed declared that he believed that the American economy was not currently in recession, but that it was slowing down.
Jerome Powell added that the lack of long-term visibility for the economy meant that the Fed could clearly state the direction of its monetary policy only “meeting by meeting”.
“Powell’s willingness to let the data guide (Fed officials) going forward is something that has pleased the market,” commented Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
“He didn’t say we automatically need another rate hike,” he added, noting the soothing nature of the US central bank boss’ statements.
Similar to last month, and after smaller increases in March and May, the Fed decided to raise interest rates by 75 basis points as part of its efforts to dampen inflation, which has been running at a multi-decade peak.
Microsoft rose 6.7% after saying it expected double-digit revenue growth at the end of the current fiscal year.
Alphabet rose 7.7% the day after its Google search engine posted better-than-expected ad sales, allaying concerns about a slowing ad market.
(French version Jean Terzian)