S&P 500, Dow rise 0.2% after Fed rate hike

S&P 500, Dow rise 0.2% after Fed rate hike

Futures on the benchmark S&P 500 and Dow Jones Industrial Average soared 0.2% above the flatline, while contracts on the technology-heavy Nasdaq Composite went up 0.1%. The move follows a sell-off that saw the S&P 500 and Dow each drop around 1.7% and the Nasdaq tumble 1.8%.

The benchmark S&P 500 had 34 declines for the index this year, according to data from Compound Advisors, and this year's losses was the 29th decline between 1% and 2%.

In the aftermath of the Fed decision, the rate sensitive 2 year Treasury note held near 4.1%, its highest since 2007, while the 10 year remained near 3.5%, its highest level since 2011.

On Wednesday, U.S. central bank officials raised interest rates by 75 basis points for a third straight time, bringing the federal funds rate to a new range of 3.0% to 3.25% from a current range between 2.25% and 2.5%.

The fed funds rate is projected to increase to 4.4% by the end of the year and 4.6% by the end of 2023, according to policymakers. That is up from 3.4% for this year and 3.8% previously.

The Fed is engineering a hard landing, a soft landing is almost out of the question, according to Principal Global Investors Chief Global Strategist Seema Shah. Powell s admission that there will be below-trend growth for a period should be translated as central bank speak for a recession. Shares of Lennar LEN were pared earlier losses in extended trading after the homebuilder said its third quarter results were impacted by higher rates. Wall Street's estimate of $9.04 billion didn't include the revenue of $8.9 billion for the quarter. Net earnings per share increased 11% to $5.03.

KB Home KBH was a mover after the company cited headwinds from ongoing supply chain constraints and warned that those issues could affect fourth quarter results. After recovering from a decline, the shares were flat.

On Thursday, Costco COST Darden Restaurants DRI FactSet FDS and FedEx FDX issued a pre-results warning last week about the possibility of a global recession that sent its stock price spiraling in the worst day on record for the shipping giant.