Investors took a break from worrying about Russia and Ukraine and applauded comments from Jerome Powell.
Stocks rose sharply Wednesday after the Federal Reserve chair told the House Financial Services Committee that the Fed would likely raise interest rates by just a quarter-point at its meeting next month.
“I’m inclined to propose and support a 25 basis point rate hike,” he said.
The Dow was up nearly 550 points, or 1.6%, in late morning trading. The S&P 500 rose 1.5% and the Nasdaq gained about 1%.
Investors had been worried that the Fed might look to raise rates more aggressively due to inflation concerns, especially as oil prices have soared due to Russia’s invasion of Ukraine. Stocks plunged Tuesday.
But Powell allayed those fears Wednesday. And given how much we constantly hear about the market hating uncertainty, Wall Street seems thrilled to have more clarity about where rates are heading next.