US stocks rise after Federal Reserve hikes rate to battle inflation

The Dow Jones Industrial Average rose 0.04%, the S&P 500 gained 0.45%, the Nasdaq Composite gained 0.86%

US stock indices surged on Wednesday after the Federal Reserve unanimously raised the interest rate by 25 bps as expected, marking the first rate hike since 2023 as inflation remains elevated, while a decline in crude oil prices offered some relief amid ongoing concerns over the Middle East conflict.

The projections also showed that a strong majority of policymakers think another hike is possible later this year.

Market participants will closely track comments from Fed Chair Kevin Warsh for indications about the central bank's assessment of inflation and the potential direction of interest rates.

The Dow Jones Industrial Average rose 23.70 points, or 0.04%, to 52,114.07, the S&P 500 gained 34.02 points, or 0.45%, to 7,619.75 and the Nasdaq Composite gained 222.62 points, or 0.86%, to 26,204.20.

Meanwhile, fresh economic data showed that US retail sales increased 1.2% month-on-month in August to $773.9 billion, exceeding market expectations.

The increase was partly supported by higher gasoline prices during the month.

Crude oil prices moved lower after reports that Saudi Arabia was offering additional crude cargoes through Oman.

The development eased some concerns about the extent of potential supply disruptions linked to the escalating Middle East conflict.

Brent crude futures were down 1.1% at $107.55 a barrel, while US West Texas Intermediate crude futures declined 1.9% to $103.82.

The movement in oil prices remains an important factor for markets because a prolonged increase in energy costs could add to inflationary pressures and complicate the Federal Reserve's policy outlook.

Among individual stocks, Meta shares gained 1.1%, while Microsoft edged lower.

Intel shares jumped 5.6% following a report that South Korea's SK Hynix was in discussions with the chipmaker about memory-chip manufacturing in the United States.

The reported talks would mark the first such manufacturing discussions between the two companies in the US.

US-listed shares of SK Hynix also moved higher, gaining 2.5% during the session.

As of 09:25 a.m. EDT (1325 GMT), spot gold was up 1.4% at $4,353.82 per ounce. US gold futures for December delivery rose 1.4% to $4,395.10.

Spot silver rose 1.4% to $64.55 per ounce, platinum gained 0.7% to $1,788.15, and palladium was up 1.1% at $1,303.5.

With a distinguished career spanning nearly two decades at the highest levels of financial journalism, Rajendra Kumar Saxena stands as a cornerstone of the editorial leadership team at Livemint.com. In his current capacity as Content Editor, he is responsible for managing the comprehensive editorial lifecycle of the publication. His role is multifaceted, encompassing the strategic selection of high-impact stories, original reporting, and meticulous editing. Furthermore, Rajendra is instrumental in executing a sophisticated Search Engine Optimization (SEO)-driven content strategy, ensuring that the platform's digital content reaches a global audience while maintaining the highest standards of journalistic integrity and accuracy prior to publication. Rajendra’s professional journey is characterized by a profound expertise in a wide array of critical sectors. His analytical depth covers global economics, commodities, and stock market dynamics (across both Indian and United States landscapes). Beyond the financial markets, he possesses a keen understanding of political affairs, banking and finance, foreign affairs, and the rapidly evolving technology sector. His eighteen years journey in financial and business journalism includes a significant tenure at Financialexpress.com and freelance contributions to The Hindu. Currently based in Delhi, Rajendra holds a Master of Journalism degree from the prestigious Makhanlal Chaturvedi National University of Journalism and Communication (MCNUJC). His blend of academic rigor and decades of on-the-ground experience makes him a leading voice in navigating the complexities of today’s financial world.