The Nasdaq composite led the upside in today's market, while the Dow Jones and S&P 500 traded more than 1% higher. Stocks closed near intraday highs after a dose of volatility following the Federal Reserve's decision to raise interest rates by 0.75%. This is the largest move it has made in a single meeting since 1994.
Dow Jones Today
The Dow Jones Industrial Average rose 301 points, up 1% at the close. Meanwhile, the S&P 500 gained 1.5%. Small caps held up as the Russell 2000 rose 1.6%. The tech-heavy Nasdaq composite saw a 2.5% increase, after weekly losses of over 5% last week. Volume was higher on the Nasdaq and on the NYSE vs. the close on Tuesday, according to early data.
While today's move higher in heavy volume is a sign of hope, the overall market remains in a correction with bears in control for now. Investors must maintain a healthy cash position and hold off on new buys right now.
The indexes all moved off Tuesday's low while remaining solidly below their 21-day exponential moving averages.
U.S. Stock Market Today Overview |
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|---|---|---|---|---|
| Index | Symbol | Price | Gain/Loss | % Change |
| Dow Jones | (0DJIA) | 30668.27 | +303.44 | +1.00 |
| S&P 500 | (0S&P5) | 3789.91 | +54.43 | +1.46 |
| Nasdaq | (0NDQC ) | 11099.16 | +270.81 | +2.50 |
| Russell 2000 | 171.86 | +2.48 | +1.46 | |
| IBD 50 | 29.68 | +0.00 | +0.00 | |
Last Update: 4:38 PM ET 6/15/2022 |
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At 2 p.m. ET Wednesday, the Fed announced its final decision on interest rates was to raise its main borrowing rate by 75 basis points. This was the biggest hike in nearly 30 years. Meanwhile, inflation is rising at its biggest rate in 40 years. This raises the benchmark federal funds rate to a target between 1.5% and 1.75%.
With May's CPI coming in even hotter, Powell said policymakers thought "strong action was warranted." Policymakers are likely to decide between a half-point hike and a 75-basis-point move at the July meeting. "There's no sign of a broader slowdown in the economy," Powell said. He sees the U.S. economy as "well-positioned to deal with higher interest rates."
Other important economic events this week include retail sales, which will be announced Wednesday at 8:30 a.m. ET, and the Industrial Production Index, due Friday at 9:30 a.m. ET.
Outside Dow Jones: IBD 50 Stocks Underperform
The growth-focused IBD 50 ETF closed at break-even on Wednesday as shares traded tightly in light volume. The index found resistance at its 50-day line last week and was sent lower.
Many stocks in the coal energy space recouped weekly losses and led the upside in the index, including Ramaco Resources and Alpha Metallurgical Resources. The coal stocks were up 8% and 6%, respectively. Ramaco gained momentum in a bounce off its 50-day line. The moving average has been trading sideways alongside the stock's price in recent weeks.
Alpha Metallurgical barely held onto its 50-day line, closing just above this area Wednesday. The stock could be securing another test of this moving average after multiple successful bounces. The stock has been above key moving averages since a cup breakout from January.
Oil Stocks Slide On Biden Warning
Several oil and gas stocks led the downside in the index, with Excelerate Energy leading the downside. The stock lost 7% and continued to fade from a recent failed breakout attempt above a 29.20 buy point. The IPO stock recently went public on April 13.
A number of oil stocks were sent lower after President Joe Biden warned he may resort to using emergency powers if American oil companies fail to increase output at refineries.
Oil giants were slipping, with Dow Jones leader Chevron and Exxon Mobil both tumbling between 1% and 2%. ConocoPhillips dropped 2% while Shell pared losses of 2% to break-even.
Leaderboard stock Occidental Petroleum was down almost 3% while IBD 50 stock Matador Resources fell over 2%.
This Growth Stock Breaks Out
World Wrestling Entertainment scored a notable breakout as shares rose 5% in very strong volume. According to IBD Leaderboard analysis, "The professional wrestling play is back above the top turnbuckle of its buy zone from a 63.81 entry. The stock had been slammed amid broader pressure earlier this week. The stock got a boost after Morgan Stanley raised its price target to 75 from 60. It also reiterated its equal-weight rating."
Follow Rachel Fox on Twitter at @IBD_RFox for more Dow Jones and stock market commentary.
