<p>The U.S. Federal Reserve hiked interest rates by 25 basis points (bps), or a quarter percentage point, on Wednesday amid elevated inflation and a strong job market. The Federal Open Market Committee approved the following statement for release by a 12–0 vote.</p> <p>This move comes as the Fed pivots its attention to inflation amid energy price fluctuations from the conflict in Iran, while the job market remains resilient.</p> <p>“Economic activity is expanding at a solid pace. While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient,” the Fed said in a policy statement. “Today’s policy action will support a timelier return to the Committee’s 2 percent goal.”</p> <p>The typical Federal Reserve official projects underlying inflation reaching 3.4% as 2026 concludes, up slightly from the 3.3% estimate in June. Meanwhile, gross domestic product expansion is expected to reach 2.3%, up from the prior 2.2% projection.</p> <h2><strong>How Markets Reacted To The Fed </strong></h2> <p>The S&P 500 was up 0.3%, Nasdaq 100 gained 0.7%, and the Dow Industrials fell 0.1% as of 2:10 PM ET.</p> <p>Treasury yields dropped, calming off multi-year highs. The two-year yield eased nearly 1 basis point to 4.668%. The 10-year Treasury yield was down 5 basis points to 4.95%.</p> <p>At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up 0.3%, while the Invesco QQQ Trust (QQQ) gained 0.7%. Retail sentiment around the S&P 500 ETF on Stocktwits was in the ‘bearish’ territory. </p> <p>For updates and corrections, email newsroom[at]stocktwits[dot]com.<</p>
