Wall Street jumps on rate hike; China stocks rebound, BABA, BIDU soar

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Wall Street jumps on rate hike; China stocks rebound, BABA, BIDU soar

 Wall Street jumps on rate hike; China stocks rebound, BABA, BIDU soar
Image source: © 2022 Kalkine Media®

 

Wall Street indices rallied on Wednesday, March 16, after the Federal Reserve raised its interest rates by 25 basis points and signaled more hikes to follow to halt the spiraling high inflation.

The S&P 500 rose 2.24% to 4357.86. The Dow Jones rose 1.55% to 34063.10. The NASDAQ gained 3.77% at 13436.55, and the small-cap Russell 2000 was up 3.14% to 2030.72.

Stocks across the industry segments rallied after the central bank announced the quarter-percentage-point increase in its benchmark rate as widely expected.

Noting that the ongoing Russia and Ukraine conflict has fuelled more economic uncertainty, the bank stressed that it would take “appropriate” steps, including further hikes, to reduce stress. 

The US witnessed its highest inflation in 40 years, driven by various hostile market forces. The Ukraine war has intensified the concerns over global supply chains and economic growth. The new Covid-19 restrictions in China might compound the supply-chain issues.

However, the Fed’s aggressive stance on rates has led some economists to worry about a looming recession. They said the bank’s previous prognosis about inflation was shortsighted. The latest projections show that the rates may increase by at least 1.875% by the year-end.

Bond yields climbed after the Fed hiked the rates. The yield on the 10-year Treasury note rose to 2.192% on Wednesday, reflecting investors’ growing confidence that the Russian invasion of Ukraine won’t slow the pace of the bank’s rate plans.

The international benchmark Brent crude futures slid further by 1.9% to US$98.02 a barrel.

After the sharp decline of the US-listed Chinese stocks, the ADRs surged on Wednesday as Beijing signaled support in the matter. The state media citing Vice Premier Liu He reported that the government might soon end the crackdown on tech companies. Reports added that the US and Chinese officials are working on a cooperation plan on the US-listed Chinese stocks.

Alibaba Group Holding Limited (BABA) jumped more than 36%, DiDi Global Inc. (DIDI) surged over 41%, and JD.com, Inc. (JD) gained more than 39% on the news. Other Chinese stocks like Pinduoduo Inc. (PDD) and Baidu, Inc. (BIDU) jumped over 56% and 39%.

In the Chinese markets, the tech stocks led a blazing rebound after the positive comments. The Hang Seng Index rallied 9.1%, while the Shanghai Composite was up 3.5%.

On Wednesday, consumer discretionary and technology sectors were the top movers on the S&P 500 index. Energy and utility were the laggards. Nine out of the 11 sectors of the index closed in the green.

In the consumer discretionary sector, Amazon.com, Inc. (AMZN) climbed by 3.89%, Tesla, Inc. (TSLA) rose 4.78%, and Nike, Inc. (NKE) advanced 4.85%.

Toyota Motor Corporation (TM) was up 3.59% in intraday trading.

In technology stocks, Apple Inc. (AAPL) grew 2.90%, Microsoft Corporation (MSFT) soared 2.52%, and Nvidia Corporation (NVDA) surged 6.63%.

ASML Holdings N.V. (ASML) and Taiwan Semiconductor Manufacturing Company Limited (TSM) ticked up 9.04% and 4.03%, respectively.

In the energy sector, Schlumberger Limited (SLB) decreased by 3.52%, TC Energy Corporation (TRP) declined by 1.25%, Occidental Petroleum Corporation (OXY) fell by 2.82%. Devon Energy Corporation (DVN) and Baker Hughes Company (BKR) tumbled 1.04% and 3.50%, respectively.

The cryptocurrency market was up 3.43% to US$1.82 trillion at around 3 pm ET, as per coinmarketcap.com. Bitcoin (BTC) rose about 3.53% to US$41,151.57 in the last 24 hours. 

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Consumer discretionary and technology sectors were the top movers on the S&P 500 index on Wednesday.

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Nine out of the 11 sectors of the S&P 500 index closed in the green.

Also Read: Why is ECOMI (OMI) crypto gaining attention?

Futures & Commodities

Gold futures declined 0.08% to US$1,926.50 per ounce. Silver futures fell 0.19% to US$25.188 per ounce, while copper futures were up 0.17% to US$4.6307.

Brent oil futures fell 0.09% to US$98.00 per barrel and WTI crude futures declined 0.04% to US$5.23.

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Bond Market

The 30-year Treasury bond yields fell 0.22% to 2.463, while the 10-year bond yields rose 0.23% to 2.192.

US Dollar Futures Index fell 0.72% to US$98.350.

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