Stock Market Today: Dow Rises After Fed Raises Rates

The Dow extended gains on Wednesday as Federal Reserve Chairman Jerome Powell signaled that the Fed may slow the pace of rate hikes at some point, while technology rallied, quarterly results from Alphabet and Microsoft were not as bad as feared.

The Dow Jones Industrial Average gained 1.4%, or 436 points, the Nasdaq 4.1% and the S&P 500 2.5%. After the Fed's 0.75% rate hike on Wednesday, Powell floated the idea of another "unusually large" rate hike in September, but said the Fed could slow the pace of rate increases to assess the impact on inflation and the economy. "As the stance of monetary policy tightens further, it would probably be appropriate to slow the pace of increases ... as we assess how our cumulative policy adjustments are affecting the economy and inflation," Powell said. The 2-year Treasury bond yield, which is sensitive to the Fed's rate hikes, fell to session lows after the comments as investors priced in expectations that rate hikes would pause or slow. The technology sector, on the other hand, added to its recent gains following the rise in Alphabet and Microsoft. Alphabet (NASDAQ:GOOGL) reported earnings and revenue that fell short of estimates, but results were better than feared, driven by strength in its search business, sending its shares up more than 7%. "GOOGL's better-than-feared results continued against an uncertain macro backdrop, with the search advantage offset by slight softness in YouTube, Cloud and Other revenue," RBC said in a note. Microsoft (NASDAQ:MSFT) also reported a miss on both the top and bottom lines, largely due to a stronger dollar and the impact of lockdowns in China, Wedbush said, but added that the tech giant's growth story remains intact. Its shares rose more than 6%. Wedbush added that Microsoft's growth story is "cloud and core Azure growth, which was healthy this quarter and looks set to accelerate through 2023 despite economic headwinds." Semiconductor stocks were also supported as better-than-expected quarterly results and guidance from Texas Instruments (NASDAQ:TXN) boosted sentiment on chip stocks. NVIDIA (NASDAQ:NVDA), Monolithic Power Systems (NASDAQ:MPWR) and ON Semiconductor Corporation (NASDAQ:ON) were among the top gainers.   Source: investing.com