Wall Street ends higher as Fed holds key rate steady, focus turns to earnings
SPY•US stock indexes ended higher after the Federal Reserve held its key rate steady and upgraded its economic outlook. Markets priced in an 85% likelihood of a quarter-point rate hike in December, while 84% of S&P 500 companies that had reported earnings beat consensus estimates.
1. Stocks finish higher
The Dow rose 0.19%, the S&P 500 gained 0.28% and the Nasdaq advanced 0.27% on Wednesday after the Federal Reserve left its key policy rate unchanged, as widely expected. The Fed upgraded its assessment of the economy while saying inflation remained elevated.
2. Rate expectations rise
Financial markets priced in an 85% likelihood of a 25-basis-point rate hike at the Fed's December meeting, up from 78.3% on Tuesday. Investors were also looking ahead to Thursday's Personal Consumption Expenditures report and advance estimate of third-quarter GDP.
3. Earnings in focus
With 200 S&P 500 companies having reported, 84% beat consensus estimates; analysts estimated third-quarter earnings growth of 31.8% year on year. Micron gained 5.9% after SK Hynix reported a more than sevenfold jump in quarterly profit, while Microsoft rose more than 4% in extended trading after results and Alphabet fell more than 7%.
