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US stocks hit new highs on Wednesday after the Federal Reserve raised interest rates and signaled the gradual continuation of future increases.
The S & P 500 climbed 0.3%, putting it on track to end a three-game losing streak and just below last week's record high. The Dow Jones Industrial Average added 50 points, or 0.2%, to 26542. The Nasdaq Composite, heavily loaded in technology, grew by 0.5%.
Wednesday's projections showed that most Fed officials planned to raise rates this year and three more next year, in line with the expectations of many investors, which could mitigate concerns about tighter financial conditions of the central bank.
The Federal Reserve raised interest rates on Wednesday and announced a gradual continuation of future increases.
Photo:
Chris Wattie / Reuters
"It tells investors that they think the economy is doing well, but it is not so important that it worries about it," said Peter Lazaroff, co-chief investment officer at Plancorp. .
According to Tradeweb, the yield on the 10-year US Treasury benchmark fell from 3.102% to 3.085%. Yields, which decline as bond prices rise, have recently reached their highest level in seven years, in a context of confidence in the global economy. The WSJ Dollar Index, which tracks the dollar against a basket of 16 other currencies, added 0.1%.
The recently formed communication and health care sectors were among the top performers on Wednesday, allowing the stock market to expand. Communication services shares in the S & P 500 increased by 1%, boosted by
Netflix
,
and health care stocks increased 0.7%.
Health stocks were the market leader this quarter and rose after
Alexion Pharmaceuticals
stated that it agreed to purchase Syntimmune, a clinical-stage biotechnology company. Alexion shares rose 5.3%, and
Incyte
and
Vertex Pharmaceuticals
were also among the best performances of the S & P 500.
These gains offset the decline in stocks of commercially sensitive materials, with some analysts nervously watching the latest developments in trade policy. Tuesday, the Trump administration's chief trade negotiator threatened to move ahead with a bilateral deal with Mexico as Canada failed to make progress on renegotiating the North American Free Trade Agreement .
Despite global trade tensions, some investors expect economic and profit figures to continue to push stocks forward.
Nike
fell 0.7% on Wednesday, after the sportswear manufacturer said its spending rose in the last quarter, but nevertheless exceeded its earnings targets.
While worries over tighter financial conditions have generally faded recently, some analysts are closely watching a recent rise in oil prices, which could fuel fears of rising inflation. Oil prices fell slightly on Wednesday, after Brent crude, the global benchmark, closed at its highest level since November 2014 in a previous session.
In recent days, rising oil prices have become increasingly important in the markets, but trade tensions remain a source of concern for investors, said Mohammed Kazmi, manager of the bank. UBP based in Geneva.
Elsewhere, the Stoxx Europe 600 rose 0.3% to its highest level of the month.
Some investors remain cautious about European policy, as the nearly four-month-old Italian government prepares to expose its budget and economic forecasts ahead of a discussion on the October budget bill.
A recent rebound in Asian equities has continued. Japan's Nikkei Stock Average added 0.4%, reaching its highest level since January, and Hong Kong's Hang Seng rose 1.2%.
Write to Amrith Ramkumar at [email protected]
Corrections and amplifications
Government bond prices rose slightly on Wednesday. An earlier version of this article incorrectly stated that bond prices had fallen. (September 26, 2018)
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