Futures tied to the Dow Jones Industrial Average added 23 points, or less than 0.1% and those for the S&P 500 and Nasdaq 100 hovered just above the flat line
U.S. stock futures were quiet on Wednesday evening as investors digested the latest projections from the Federal Reserve.
Futures tied to the Dow Jones Industrial Average added 23 points, or less than 0.1%. Those for the S&P 500 and Nasdaq 100 hovered just above the flat line.
The moves in futures come after the Federal Reserve hiked its benchmark interest rate for the first time since 2018 and signalled six more hikes this year, spurring a relief rally in stocks.
The Fed significantly raised its projections for rate hikes and inflation in 2022, but investors appear to have taken those aggressive changes as proof the central bank was taking the rise in prices seriously.
The dot plot shows they’re behind the curve, and we all know they’re behind the curve, and they’re trying to fix it, said Stephanie Link, chief investment strategist and portfolio manager at Hightower Advisors. At least they’re telling the market ‘we’re trying to fix it.’
Jeffrey Gundlach, CEO of DoubleLine Capital, said that he expected markets to rally between now and the next Fed meeting in May after selling off sharply to start the year. He pointed to recent high readings on the Cboe Volatility Index, often called Wall Street’s fear gauge, as a sign that the selling had gone far enough, at least in the near term.
When the VIX gets above 35, I don’t care how bad the tape looks, I don’t care how bad the geopolitics look, you’re supposed to get more bullish, not more bearish. And you get an oversold bounce, Gundlach said.
On Wednesday, the Dow added 518.76 points, or 1.55%, for its first three-day winning streak in more than a month. The S&P 500 rose 2.24%, while the Nasdaq Composite climbed 3.77%.