U.S. stocks turned sharply higher on Wednesday after the Federal Reserve fired off another 75 basis point rate increase in an attempted to cool inflation that’s been tough to coax down from a four-decade high. The Dow Jones Industrial Average DJIA, -1.55% was up 322 points, or 1%, trading near 32,977. The S&P 500 index SPX, -2.50% was up 0.7%, while the Nasdaq Composite Index COMP, -3.36% was 0.5% higher, after all three indexes earlier in the session were lower, heading for a third day in a row of losses, according to FactSet. While investors were widely anticipating the fourth straight jumbo rate increase from the Fed, they also have been warming to the idea that Chairman Jerome Powell might be willing to deliver a smaller rate increase in December, particularly with stocks and bonds awash in losses this year and with the U.S. housing market’s dramatic pullback in the face of 7% fixed rate 30-year mortgages. On the flip side, the Fed has been contending with a roaring labor market that’s helped fuel the kind of inflation the central bank wants to tame, potentially leaving it with little choice but to trigger a recession in a bid to avoid inflation becoming entrenched in the economy. The 10-year Treasury yield TMUBMUSD10Y, 4.104% was down 6 basis points after the Fed decision near 3.99%, while the dollar DXY, +0.54% was off 0.1% at about 111.39 against a basket of rival currencies. Gold futures GC00, -0.67% were up 0.2% following the Fed decision, after settling up 30 cents at $1,650 an ounce on Comex.
