US close: Stocks mixed as Fed takes interest rates to 22-year high

Wall Street’s main stock indexes closed in a mixed state on Wednesday, with the Dow extending its record-breaking streak to 13 consecutive winning sessions as the Federal Reserve took interest rates to their highest levels in more than 20 years.

At the close, the Dow Jones Industrial Average was up 0.23% at 35,520.12, while the S&P 500 dipped slightly by 0.02% to finish the day at 4,566.75.

The tech-heavy Nasdaq Composite Index also saw a marginal decline of 0.12%, settling at 14,127.28.

On the currency front, the dollar was last down 0.23% on sterling at 77.09p, while it slipped by the same rate to trade at 90 euro cents.

The greenback experienced a more significant drop against the yen, dropping 0.51% to change hands at JPY 139.53.

“The Fed has nodded in agreement with market expectations, and as a result, a symphony of harmony has resonated in the financial world,” said Zaye Capital Markets chief investment officer Naeem Aslam.

“Like a perfectly orchestrated melody, today’s synchronised move stroked a chord of confidence among traders, and it is guiding them through the economic crescendo.

“Basically, the Feds know that with their aligned steps, they can dance towards stability and embrace the rhythm of progress.”

Interest rate hikes and home sales slump stir economic waters

On the economic front the Federal Reserve, sticking to its monetary tightening agenda, increased interest rates on Wednesday, paving the way for possible further hikes if deemed necessary.

The primary lending rate experienced a jump of 25 basis points, setting the new bar between 5.25% and 5.50% - a level unseen in the past 22 years.

The Federal Open Market Committee (FOMC) expressed its commitment to persistently evaluate additional data and its implications on the monetary policy.

In recent months, the FOMC had characterised the jobs market as "resilient," recognized low unemployment rates, and acknowledged the prevalence of "elevated" inflation.

The committee declared its unwavering commitment to guide inflation back to its targeted 2% in its decision.

However, it did caution over the potential negative impact of stricter credit conditions on economic activities, with the extent of the effect still being "uncertain".

It also confirmed the continuation of the reduction of the Fed's Treasury securities, agency debt, and agency mortgage-backed securities as planned earlier.

Wednesday's decision had the full support of all the participants.

Earlier in the day, new home sales figures for the last month fell noticeably short of economists' predictions.

The Department of Commerce reported that new home sales, adjusted for seasonal variations, dropped by 2.5% month-on-month, resulting in an annual rate of 697,000, which undercut the anticipated figure of 721,000.

That surprising downturn followed a downward correction of May's figure from 763,000 to 715,000.

Despite that, the volume of new homes ready for sale edged up to the equivalent of 7.4 months' worth of sales, from 7.2 in May.

Median sales price for new homes slightly dipped from $417,300 to $415,400, while the average price saw a slight increment, moving from $488,700 to $494,700.

On a regional basis, the Northeast and South experienced a surge in new home sales compared to the previous month, while the Midwest and West saw a dip.

PacWest and Alphabet soar as Microsoft slips

In equity markets, PacWest Bancorp surged 26.92% following the announcement of its merger with Banc of California, which itself saw a modest increase of 0.62%.

Google's parent company Alphabet saw its shares rise 5.59%, spurred by the release of its latest quarterly numbers.

Aerospace giant Boeing ticked 8.72% higher after it announced second-quarter free cash flow totalling $2.58bn, substantially exceeding market expectations.

On the downside, Microsoft fell 3.76% in the wake of its first quarter figures, which failed to meet market expectations.

Reporting by Josh White for Sharecast.com.

Dow Jones - Risers

Boeing Co. (BA) $232.80 8.72%
3M Co. (MMM) $112.64 2.56%
Home Depot Inc. (HD) $329.59 1.37%
Coca-Cola Co. (KO) $63.05 1.29%
Travelers Company Inc. (TRV) $174.18 1.19%
Nike Inc. (NKE) $109.30 0.92%
Goldman Sachs Group Inc. (GS) $357.56 0.81%
Intel Corp. (INTC) $34.36 0.76%
American Express Co. (AXP) $167.75 0.75%
JP Morgan Chase & Co. (JPM) $157.76 0.60%

Dow Jones - Fallers

Microsoft Corp. (MSFT) $337.77 -3.76%
Caterpillar Inc. (CAT) $258.32 -1.43%
Chevron Corp. (CVX) $161.34 -0.75%
Cisco Systems Inc. (CSCO) $53.22 -0.71%
Visa Inc. (V) $237.13 -0.67%
Unitedhealth Group Inc. (UNH) $508.00 -0.57%
Merck & Co. Inc. (MRK) $107.14 -0.36%
McDonald's Corp. (MCD) $291.75 -0.21%
Salesforce.Com Inc. (CRM) $225.58 -0.20%
Amgen Inc. (AMGN) $235.21 -0.04%

S&P 500 - Risers

Union Pacific Corp. (UNP) $238.02 10.42%
Hanesbrands Inc. (HBI) $5.27 9.11%
Boeing Co. (BA) $232.80 8.72%
Gap Inc. (GPS) $9.92 7.71%
Zions Bancorporation (ZION) $38.45 7.46%
Keycorp (KEY) $12.43 6.88%
Comerica Inc. (CMA) $53.47 6.43%
Kohls Corp. (KSS) $27.91 6.24%
Alphabet Inc. Class A (GOOGL) $129.27 5.78%
Alphabet Inc. Class C (GOOG) $129.66 5.59%

S&P 500 - Fallers

Fiserv Inc. (FI) $0.00 -100.00%
Affiliated Mgrs Group (AMG) $141.57 -12.38%
Allegion (ALLE) $117.30 -7.69%
Dish Network Corp. (DISH) $7.22 -6.48%
Quest Diagnostics (DGX) $136.24 -5.99%
Robert Half Inc. (RHI) $75.43 -5.96%
Arista Networks Inc. (ANET) $164.45 -5.54%
Universal Health Services Inc. (UHS) $141.42 -5.49%
Texas Instruments Inc (TXN) $176.00 -5.42%
Travel + Leisure Co (TNL) $39.05 -5.31%

Nasdaq 100 - Risers

Alphabet Inc. Class A (GOOGL) $129.27 5.78%
Alphabet Inc. Class C (GOOG) $129.66 5.59%
Automatic Data Processing Inc. (ADP) $253.45 5.39%
Check Point Software Technologies Ltd. (CHKP) $132.11 2.64%
NetEase Inc. Ads (NTES) $108.99 2.64%
Micron Technology Inc. (MU) $67.38 2.59%
Vodafone Group Plc ADS (VOD) $10.03 2.45%
Align Technology Inc. (ALGN) $339.85 2.32%
Paychex Inc. (PAYX) $127.75 2.18%
Qurate Retail Inc. (QRTEA) $1.03 1.96%

Nasdaq 100 - Fallers

Fiserv Inc. (FI) $0.00 -100.00%
Dish Network Corp. (DISH) $7.22 -6.48%
Texas Instruments Inc (TXN) $176.00 -5.42%
Sirius XM Holdings Inc (SIRI) $4.89 -4.68%
Microsoft Corp. (MSFT) $337.77 -3.76%
Microchip Technology Inc. (MCHP) $88.33 -2.76%
Broadcom Inc. (AVGO) $893.09 -2.71%
Analog Devices Inc. (ADI) $191.52 -2.12%
Adobe Systems Inc. (ADBE) $514.55 -2.05%
PACCAR Inc. (PCAR) $84.61 -1.97%