Fed rate hike weighs on Wall Street, tech stocks show strength

The interest rate hike did not come as a surprise to Wall Street. However, the fact that the Fed is also promising further interest rate hikes is not well received. The stock markets then went down, but tech stocks held their ground.

The Fed's first interest rate hike in more than three years sent investors on Wall Street fleeing on Wednesday. The Dow Jones index of standard stocks closed 1.2 percent lower at 51,462 points. The broader S&P 500 fell 0.4 percent to 7,552 points. The Nasdaq technology exchange index remained almost unchanged at 25,978 points. Before the interest rate decision, the indices were still in the black.

Against the background of stubbornly high inflation, the monetary authorities raised the key interest rate by 0.25 points. The inflation is being driven by the sharp rise in crude oil prices as a result of the US and Israel's war against Iran. The decision was unanimous, the Fed said. Further interest rate steps are likely in the near future in order to reduce inflation in a timely manner.

Fed Chairman Kevin Warsh said the U.S. economy had gotten stronger since the last meeting, but inflation trends had barely improved. “The fact is that the Fed appears to be united in the fight against inflation,” said Ryan Detrick, chief market strategist at Carson Group. The good news is that the central bank does not assume that several interest rate increases in the coming months will have much of an impact on the solid overall economy. Robust retail data for August had shown that consumers continued to consume despite rising prices.

Oil prices fell on the raw materials market, dragging down the energy sector on Wall Street by 3.0 percent. Reports that Saudi Arabia is offering additional cargoes of crude oil via Oman eased concerns about supply shortages. The conflict in the Middle East had recently expanded: Saudi warplanes bombed Yemen, while Houthi fighters supported by Iran fired drones and missiles at Saudi cities. The price of the US WTI variety fell by 3.2 percent, North Sea Brent oil fell by 2.7 percent.

The shares of the oil companies Chevron and Exxon Mobil lost 2.9 and 3.5 percent respectively. Devon Energy and ConocoPhillips each fell more than five percent.

Semiconductor stocks are recovering

Technology stocks, however, posted the biggest gains among the eleven most important sectors of the S&P 500. Semiconductor stocks advanced 0.6 percent. Intel jumped 4.0 percent. According to a report, South Korean competitor SK Hynix is ​​in talks with the US company about manufacturing memory chips in the USA. IBM, on the other hand, fell 4.4 percent after the company announced that its Anderon chip unit had signed a financing agreement with the US government.

Shares on the financial platform Robinhood slipped 5.5 percent. The US Senate had blocked a comprehensive cryptocurrency bill, marking a major setback for digital asset companies. The US Department of Justice also charged two former Robinhood engineers with insider trading and misuse of confidential information on Tuesday. The shares of the aircraft manufacturer Boeing fell by 3.7 percent. CEO Kelly Ortberg said it was taking longer than expected to stabilize the production rate of the 737 MAX at 47 aircraft per month.