All three major benchmarks clawed back into positive territory on Wednesday, after the Federal Reserve announced it would accelerate the tapering timeline of its bond-buying program, at a much more aggressive pace than some anticipated. This news followed several high inflation readings, including worse-than-expected retail sales data for November. Specifically, the central bank said it will buy $30 billion less in bonds in January than it did in December, and added it expects up to three interest rate hikes in 2022.
Fed Chair Jerome Powell noted in a news conference that while the labor market has not yet fully recovered, it was time to roll back some pandemic-era policies. In response, the Dow added more than 383 points, despite being down triple digits at its session lows. Elsewhere, the tech-heavy Nasdaq and S&P 500 both logged solid wins of their own.
The Dow Jones Average (DJI - 35,927.43) added 383.3 points, or 1.1% for the day. Cisco Systems (CSCO) led the gainers, adding 3.7%, while Nike (NKE) paced the laggards with a 0.9% fall.
The S&P 500 Index (SPX - 4,709.85) rose 75.8 points, or 1.6% for the day. Meanwhile, the Nasdaq Composite (IXIC - 15,565.58) jumped 327.9 points, or 2.2% for the day.
Lastly, the CBOE Volatility Index (VIX - 19.29) shed 2.6 points, or 11.9% for the day.
Gold Loses Luster as U.S. Dollar Strengthens
Oil prices settled higher on Wednesday, after the Federal Reserve said it planned on three interest rate hikes in 2022. This helped investors brush off concerns related to the Covid-19 omicron variant, and the impact it could have on energy demand. In response, January-dated crude added 14 cents, or 0.2%, to finish at $70.87 per barrel.
Gold prices were lower, on the other hand, as investors digested news of the accelerated economic stimulus tapering. The announcement boosted the U.S. dollar, while the yellow metal suffered. February-dated gold fell $7.80, or 0.4%, to close at $1,764.50 per ounce.
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