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Stock market news live updates: Stocks tank after Fed hikes by 0.75%, Powell pushes back against pivot

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U.S. stocks were firmly higher Wednesday afternoon following a move by the Federal Reserve to raise its benchmark policy rate by 75 basis points for a fourth straight time — on par with market expectations — while hinting at a potential slower pace of monetary tightening ahead.

The S&P 500 (^GSPC) gained 0.6%, while the Dow Jones Industrial Average (^DJI) jumped 280 points, or 0.9%. The technology-heavy Nasdaq Composite (^IXIC) was up 0.3%.

“In determining the pace of future increases in the target range, the committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation and economic and financial developments,” the U.S. central bank’s policy statement said.

Investors will tune in for Powell’s press conference at 2:30 p.m. ET.

“The focus will be on what comes next, and we expect Chair Powell to hint that the Federal Open Market Committee will likely slow the pace to 50 basis points in December,” economists at Goldman Sachs led by Jan Hatzius said in a recent note.

Signals from the central bank on a potential easing in the pace of tightening are expected to serve as a tailwind for the major indexes, which closed last month higher on expectations of a policy pivot stoked by chatter from some officials suggesting a scale back of rate increases and global concerns that tightening may trigger financial instability. But some strategists have pushed back against the notion that a shift in the Fed’s path is imminent, with inflation and payrolls still elevated.

“As of now, the inflation and labor market criteria have not been met, so Mr. Powell can’t pre-announce any intention to shift to slower rate increases without contradicting what he said just six weeks ago,” Pantheon Economics Chief Economist Ian Shepherdson said in emailed comments. “Evidence of fading pressure in the pipeline is abundant, but it is yet to hit the numbers which the Fed Chair has said clearly on multiple occasions matter most, namely, the actual core inflation data.”

WASHINGTON, DC – OCTOBER 03: U.S. Federal Reserve Board Chairman Jerome Powell listens during a meeting with the U.S. Treasury Department on October 03, 2022 in Washington, DC. (Photo by Anna Moneymaker/Getty Images)

On the economic data front, U.S. private payrolls saw an unexpected increase in October, per the ADP’s national employment report, which serves as an imperfect curtain-raiser for the government’s monthly jobs report due out Friday. Wednesday data suggests the labor market remains tight despite the Fed’s efforts to tamp down growth in its fight against inflation, suggesting aggressive rate hikes may continue.

And in corporate news, shares of Estée Lauder (EL) sank more than 7% after the company slashed its full-year forecast. The cosmetics maker cited currency headwinds, lockdowns in China, and some U.S. retailers taking its cosmetics and fragrances off of their shelves amid worries of slowing demand.

Paramount (PARA) shares fell as much as 12% after the company reported a hit on profit over investments in content and said weakness in advertising revenue also weighed on the quarter.

Advanced Micro Devices (AMD) shares gained 3% after the chipmaker reported better-than-feared earnings results, even as fourth quarter revenue guidance fell short of Wall Street estimates.

The dating app Tinder is shown on a mobile phone in this picture illustration taken September 1, 2020. Picture taken September 1, 2020. REUTERS/Akhtar Soomro/Illustration

Tinder, Hinge, and OkCupid owner Match Group (MTCH) shares advanced 5% after financials showed revenue that beat analysts’ estimates and the company vowed to control costs to prepare for a dimmed economic expectations.

Mondelez International (MDLZ) shares advanced 2% in after the Oreo-maker lifted its full-year outlook on sales and profit and indicated shoppers have continued to indulge on snacks and beverages despite inflation’s pinch.

Meanwhile, shares of Airbnb (ABNB) fell nearly 10% after the company warned of slowing fourth-quarter growth as consumers sour on higher cost rentals and favor urban and cross-border destinations.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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