Stocks increased on Wednesday due to a change in focus from the quarter-point interest rate hike by the Federal Reserve to comments from Fed Chairman Jerome Powell acknowledging the decrease in inflation.
The Fed did not hint however at a pause in future hikes and maintained their stance of continuing to raise rates. There have been recent signs of a decrease in inflation and the Fed acknowledged this in their statement, but Powell added that the Fed will need to be restrictive for some time and has more work to do.
The S&P 500 gained 1 per cent, the Nasdaq Composite added 2 per cent, and the Dow Jones Industrial Average remained unchanged.
Stock benchmarks were also boosted by strong fourth-quarter corporate earnings, with companies like Peloton and Advanced Micro Devices reporting positive results. Peloton shares surged more than 25 per cent after the fitness equipment company said its net loss narrowed year over year.
Advanced Micro Devices shares gained more than 13 per cent after the semiconductor company reported a fourth-quarter earnings beat.
In after hours news, Facebook-parent Meta has just announced a $40 billion stock buyback as the company topped earnings estimates sending their shares 14 per cent in after market trading
Adani Enterprises has called off its $2.4bn equity fundraising in the latest blow to Indian billionaire Gautam Adani, who has seen shares in his industrial empire tumble after a short seller made allegations of fraud and stock manipulation. The decision to pull the share sale and refund investors marks an abrupt turn after Adani Enterprises’ shares fell 27 per cent on Wednesday, taking them well below the deal price range.
All S&P 500 sectors except for Energy finished higher overnight, with technology leading the pack, up 2.3 per cent. Best performing thematics included AI, Live streaming & Tesla related companies.
In commodity news Gold hit a session high not seen since April. The metal traded as high as $1,956.60 during Wednesday trading. That’s the highest it has traded since April 22, 2022, when gold reached $1,957.80.
Futures
The SPI futures are pointing to a 0.3 per cent gain.
Currency
One Australian dollar at 8:10 AM has strengthened compared to the US dollar yesterday buying 71.31 US cents (Wed: 70.57 US cents).
Commodities
Iron ore futures are pointing to a 1.3 per cent fall. Iron ore is 1.7 per cent lower at US$126.70 tonne.
Gold added 1.2 per cent. Silver gained 1.1 per cent. Copper fell 1 per cent and oil dropped 2.5 per cent.
Ex-dividends
Australian Foundation Investment Co (ASX:AFI) is paying 11 cents fully franked
Dividends payable
Arena REIT (ASX:ARF)
Figures around the globe
Across the Atlantic, European markets closed mixed. London’s FTSE lost 0.1 per cent, Frankfurt added 0.4 per cent while Paris closed 0.1 per cent lower.
In Asian markets, Tokyo’s Nikkei added 0.1 per cent, Hong Kong’s Hang Seng gained 1.1 per cent while China’s Shanghai Composite closed 0.9 per cent higher.
Yesterday, the Australian sharemarket closed 0.3 per cent higher at 7,502.
Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
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