Stocks extend winning streak following Fed rate increase

U.S. stocks rallied for a third consecutive day as investors warmed up to the Federal Reserve’s long-anticipated move to hike short-term interest rates for the first time in three years. Oil prices jumped back up, with investors turning their attention back to the war in Ukraine and its potential impacts on the global economy.

[Click here to read what’s moving markets heading into Friday, March 18]

The S&P 500 climbed 1.2% to 4,411.65 to log its first three-day winning streak since Feb. 2, and the Dow Jones Industrial Average advanced 1.2% to 34,480.30, also notching its first four-day rally in six weeks. The Nasdaq Composite advanced 1.3% to 13,614.78. Meanwhile, WTI Crude Oil futures and Brent Crude Oil each jumped about 9% to $103.64 and $106.79 per barrel, respectively.

St. Patrick’s Day historically tends to be one of the “most green” days of the year for stocks, according to data from LPL Financial going back to 1950. The S&P 500 is up 0.37% on average, making it one of the best days of the year.

At the end of its two-day policy-setting meeting, the U.S. central bank revealed Wednesday that it will lift its benchmark Federal Funds Rate by 0.25%, to a target range of 0.25% to 0.50%. The move was in line with what market participants had anticipated after Fed Chair Jerome Powell indicated in Congressional testimony earlier this month a 25 basis-point bump was distinctly possible.

​​“By raising interest rates, the Federal Reserve has begun the process of unwinding their pandemic-era stimulus measures in an effort to tame inflation,” Bankrate chief financial analyst Greg McBride said in a note. “This isn’t a one-and-done but the start of a series of rate hikes for the remainder of this year and well into next.”

The Fed also unveiled in its updated Summary of Economic Projections, or “dot plot,” which reflects the individual economic projections of policymakers on the Federal Open Market Committee, that the median member anticipates up to six more rate hikes in 2022, which would bring rates 1.75% higher at the end of this year. Before Wednesday’s decision, the benchmark interest rate was deliberately held near zero since mid-2020 as part of the Fed’s easy-money policies used to keep financial conditions running smoothly during the pandemic.

“The Fed didn’t rock the boat much,” LPL Financial chief market strategist Ryan Detrick said. “Yes, they lowered economic expectations in 2022 while also increasing inflation, but much of that was already priced into things. Overall, they still see strong growth, which helps support the recovery.”

The Marriner S. Eccles Federal Reserve Board building is seen in Washington, DC, March 16, 2022. – The Federal Reserve is expected to announce the first interest rate increase since the Covid-19 pandemic began at the conclusion of its policy setting meeting later today. (Photo by SAUL LOEB / AFP) (Photo by SAUL LOEB/AFP via Getty Images)

Although the key decision provided some clarity to investors who for months have awaited for the central bank to take steps forward on tightening monetary conditions, the Fed’s path forward remains muddied by geopolitical turmoil in Eastern Europe. War in Ukraine and penalizing sanctions against Russia for its invasion of the country have raised uncertainty in recent weeks over the conflict’s toll on the global economic picture.

The Fed acknowledged in a statement that came out of its meeting that implications for the U.S. economy are “highly uncertain” but likely to worsen already decades-high inflationary pressures.

“Playing catch up is the theme that Fed officials signaled to markets today as the narrative has shifted from normalizing monetary policy to laying the groundwork for a more restrictive policy and moving beyond neutral,” Allianz Investment Management senior market strategist Charlie Ripley said in commentary.

Elsewhere in markets, shares of Warren Buffett’s Berkshire Hathaway closed at $500,000 for the first time on Wednesday. The price underscored Berkshire’s status as a defensive stock at a time markets have been roiled by economic and geopolitical uncertainty. The company also purchased 18.1 million additional shares of Occidental Petroleum Corp. (OXY) this week, bringing the company’s stake in the oil giant to 14.6%. The move comes as soaring oil prices amid the war in Ukraine buoy the U.S. oil conglomerate.

Berkshire’s Class A shares have advanced 10% in 2022, even as the S&P 500 is down about 12% year-to-date. Prior to a relief rally that extended into Thursday, the benchmark index on Tuesday (the 50th trading day of the year) locked in its 6th worst start to a year ever, data from LPL financial reflected. The silver lining? The previous five worst starts were followed by notable gains, with an average gain for the rest of the year of 36%, with the exception of only 2001.

“Although we aren’t expecting 36% gains the rest of this year, it does suggest that things might be quite bad now, but we’ve been here before and we’ve seen stocks come back way more than expected,” LPL’s Detrick said.

4:28 p.m. ET: FedEx reveals profit boost from boom in online shopping

FedEx Corp. (FDX) reported a stronger quarterly profit for its fiscal third quarter, attributing gains to a surge in online shopping.

The U.S. package delivery company said adjusted net income for the period increased to $1.22 billion, or $4.59 per share, from $939 million, or $3.47 per share, a year earlier.

Revenue for the quarter ended Feb. 28 rose 9.8% to $23.6 billion.

Shares of FedEx closed 0.9% higher Thursday at $227.98 a piece and ticked up in post-market trading to $228.85 per share as of 4:25 p.m. ET after the company unveiled results after the bell.

A Federal Express truck on delivery is pictured in downtown Los Angeles, California October 29, 2014. Determined not to repeat a holiday season that left millions of packages delivered too late and customers seething, United Parcel Service Inc and FedEx Corp are investing heavily in new infrastructure - but the continued dynamic growth of e-commerce will test those efforts. The world's two largest shipping companies are building new facilities, adding more temporary holiday workers and pushing retailers to help them avoid a recurrence of a pre-Christmas shipping logjam.    REUTERS/Mike Blake (UNITED STATES - Tags: BUSINESS)

A Federal Express truck on delivery is pictured in downtown Los Angeles, California October 29, 2014. Determined not to repeat a holiday season that left millions of packages delivered too late and customers seething, United Parcel Service Inc and FedEx Corp are investing heavily in new infrastructure – but the continued dynamic growth of e-commerce will test those efforts. The world’s two largest shipping companies are building new facilities, adding more temporary holiday workers and pushing retailers to help them avoid a recurrence of a pre-Christmas shipping logjam. REUTERS/Mike Blake (UNITED STATES – Tags: BUSINESS)

4:14 p.m. ET: U.S. House seeks to strip Russia, Belarus ‘most-favored’ trade status

The U.S. House of Representatives supported legislation that would rid Russia and Belarus of their “most favored nation” trade status over the invasion of Ukraine. The move would allow higher tariffs on imports from the two countries.

With voting still underway, the Democratic-controlled House tallied 320 to five in favor of removing Permanent Normal Trade Relations (PNTR) status in the latest Congressional effort to place further economic pressure on Moscow and close ally Belarus.

A two-thirds majority is needed for the legislation to pass in the 435-member House.

4:00 p.m. ET: S&P 500, Dow, and Nasdaq build on gains as investors adjust to rate hike

Here’s how markets closed at the end of Thursday’s session:

  • S&P 500 (^GSPC): +53.50 (+1.23%) to 4,411.36

  • Dow (^DJI): +416.87 (+1.22%) to 34,479.97

  • Nasdaq (^IXIC): +178.23 (+1.33%) to 13,614.78

  • Crude (CL=F): +$8.53 (+8.98%) to $103.57 a barrel

  • Gold (GC=F): +$27.60 (+1.45%) to $1,936.80 per ounce

  • 10-year Treasury (^TNX): +0.4 bps to yield 2.1920%

12:40 a.m. ET: All main indexes firmly in the green after rebound from session lows

Here were the main moves in markets as of 12:40 p.m. ET:

  • S&P 500 (^GSPC): +20.26 (+0.46%) to 4,378.12

  • Dow (^DJI): +158.20 (+0.46%) to 34,221.30

  • Nasdaq (^IXIC): +39.97 (+0.30%) to 13,476.52

  • Crude (CL=F): +$7.51 (+7.90%) to $102.55 a barrel

  • Gold (GC=F): +$34.50 (+1.81%) to $1,943.70 per ounce

  • 10-year Treasury (^TNX): -3 bps to yield 2.1580%

11:59 a.m. ET: Stocks waver to turn mixed as investors re-focus on rising energy prices

Here were the main moves in markets during intraday trading:

  • S&P 500 (^GSPC): +6.54 (+0.15%) to 4,364.40

  • Dow (^DJI): +30.12 (+0.09%) to 34,093.22

  • Nasdaq (^IXIC): -4.90 (-0.04%) to 13,431.65

  • Crude (CL=F): +$7.69 (+8.09%) to $102.73 a barrel

  • Gold (GC=F): +$40.10 (+2.10%) to $1,949.30 per ounce

  • 10-year Treasury (^TNX): -3 bps to yield 2.1580%

11:13 a.m. ET: Mortgage rates top 4%

Mortgage rates soared to their highest level since May 2019 this week, following a sharp increase in 10-year Treasury yield.

The rate on the average 30-year fixed rate mortgage jumped to 4.16 %, up from 3.85% a week ago, according to Freddie Mac. The 15-year fixed rate — a common refinance option — also surged, averaging 3.39% from 3.09% last week.

The more than quarter-point hike in rates dealt s a blow to homeowners who may have waited too long to refinance their loan and presents an additional setback for buyers who are facing some of the worst affordability conditions as prices grow higher amid low inventory on homes for sale.

“The potent fuel that propelled real estate markets to new highs over the past couple of years is evaporating,” George Ratiu, Realtor.com manager of economic research, said.

10:49 a.m. ET: Amazon closes purchase of MGM movie studio

Amazon (AMZN) announced Thursday that the online retail giant has closed a $8.5 billion deal to buy MGM as the company works to draw in consumers through more video streaming.

“We welcome MGM employees, creators, and talent to Prime Video and Amazon Studios, and we look forward to working together to create even more opportunities to deliver quality storytelling to our customers,” the company said in a statement, signaling there would be no layoffs following the transaction.

The decision to close comes after a deadline passed for the U.S. Federal Trade Commission to challenge the deal. Amazon first announced plans to buy the company in May 2021, indicating MGM offered a trove of content to draw consumers to its fast-shipping and streaming club Prime.

Amazon was up 0.7% to $3,082.58 per share as of 10:45 a.m. ET.

Niagara Falls, Canada - April 18, 2014: Metro Goldwyn Mayer Plaza in Niagara Falls. Niagara Falls city is a Canadian city on the western bank of the Niagara River. The city has many business and entertaiment options design for tourism.

Niagara Falls, Canada – April 18, 2014: Metro Goldwyn Mayer Plaza in Niagara Falls. Niagara Falls city is a Canadian city on the western bank of the Niagara River. The city has many business and entertaiment options design for tourism.

10:37 a.m. ET: Buffett snaps up more shares of Occidental Petroleum

Warren Buffett’s Berkshire Hathaway Inc. purchased 18.1 million additional shares of Occidental Petroleum Corp. (OXY), bringing the company’s stake in the oil giant to 14.6%.

Berkshire bought shares between Monday and Wednesday at prices ranging from $52.99 to $55.38, according to a company filing.

The move comes as soaring oil prices amid the war in Ukraine buoy the U.S. oil conglomerate.

OXY shares were up more than 7% to trade at $56.73 a piece as of 10:34 a.m. ET. Meanwhile, Berkshire Hathaway’s Class A shares were priced at about $508,135.34 after closing at $500,000 for the first time on Wednesday.

Berkshire Hathaway Chairman Warren Buffett walks through the exhibit hall as shareholders gather to hear from the billionaire investor at Berkshire Hathaway Inc's annual shareholder meeting in Omaha, Nebraska, U.S., May 4, 2019.   REUTERS/Scott Morgan

Berkshire Hathaway Chairman Warren Buffett walks through the exhibit hall as shareholders gather to hear from the billionaire investor at Berkshire Hathaway Inc’s annual shareholder meeting in Omaha, Nebraska, U.S., May 4, 2019. REUTERS/Scott Morgan

9:30 a.m. ET: Stocks open lower following first interest rate increase since 2018

Here were the main moves in markets as of 9:30 a.m. ET:

  • S&P 500 (^GSPC): -13.81 (-0.32%) to 4,344.05

  • Dow (^DJI): -126.25 (-0.37%) to 33,936.85

  • Nasdaq (^IXIC): -79.61 (-0.59%) to 13,356.94

  • Crude (CL=F): +$6.42 (+6.76%) to $101.46 a barrel

  • Gold (GC=F): +$33.80 (+1.77%) to $1,943.00 per ounce

  • 10-year Treasury (^TNX): -3.2 bps to yield 2.1560%

9:03 a.m. ET: New U.S. home construction rebounds to strongest pace since 2006

U.S. housing starts in February rose to the strongest pace since 2006, pointing to better success by homebuilders navigating material and labor snafus during the month.

Residential starts jumped 6.8% last month to a 1.77 million annualized rate, according to data out of Washington out Thursday. Applications to build, a measure of future construction, abated to an annualized 1.86 million units but remained elevated overall.

Economists surveyed by Bloomberg estimated a pace of 1.7 million for housing starts in February.

MIAMI, FLORIDA - APRIL 16: Construction workers build a home on April 16, 2021 in Miami, Florida. The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announced that housing starts surged 19.4% in March to their highest level since 2006. (Photo by Joe Raedle/Getty Images)

MIAMI, FLORIDA – APRIL 16: Construction workers build a home on April 16, 2021 in Miami, Florida. The U.S. Census Bureau and the U.S. Department of Housing and Urban Development jointly announced that housing starts surged 19.4% in March to their highest level since 2006. (Photo by Joe Raedle/Getty Images)

8:30 a.m. ET: Jobless claims fall to 214,000 in latest weekly data

Applications for unemployment insurance fell in the latest weekly data to extend a broader trend downward after surging COVID-19 infections earlier this winter briefly disrupted the labor market’s recovery to start the year.

The Labor Department latest weekly jobless claims report showed 214,000 claims were filed in the week ended March 12, coming in better than the 220,000 economists surveyed by Bloomberg had expected.

Jobless claims came in below 250,000 for a seventh consecutive week and hovered around pre-pandemic levels. Continuing claims, which track the total number of individuals claiming benefits across regular state programs, have held well below levels from even before the pandemic, coming in under 1.5 million for four straight weeks now compared to an average of around 1.7 million per week in 2019.

Although COVID’s impact on the labor market has appeared to ease, the economic toll the war in Eastern Europe may have remains unclear.

“Staggeringly high inflation is set to go higher in forthcoming reports because of impacts from Russia’s invasion of Ukraine and continuing supply chain disruptions including in China,” Mark Hamrick, senior economic analyst at Bankrate, wrote in an email. “These higher costs crimping household budgets risk dampening consumer discretionary purchases. It remains to be seen how much this could negatively affect the job market in the months to come.”

7:03 a.m. ET: Futures slip, oil rises as investors continue to weigh rate hike

Here’s how markets fared ahead of the open Thursday

  • S&P 500 futures (ES=F): -9.00 points (-0.21%) to 4,349.00

  • Dow futures (YM=F): -67.00 points (-0.20%) to 33,992.00

  • Nasdaq futures (NQ=F): -32.00 points (-0.23%) to 13,921.00

  • Crude (CL=F): +$4.20 (+4.42%) to $99.24 a barrel

  • Gold (GC=F): +$35.20 (+1.84%) to $1,944.40 per ounce

  • 10-year Treasury (^TNX): +2.8 bps to yield 2.1880%

6:02 p.m. ET Wednesday: Futures tick up after stocks close higher following Fed decision

Here’s where stock futures were ahead of the overnight session Wednesday:

  • S&P 500 futures (ES=F): +8.25 points (+0.19%) to 4,366.25

  • Dow futures (YM=F): +51.00 points (+0.15%) to 34,110.00

  • Nasdaq futures (NQ=F): +29.25 points (+0.21%) to 13,982.25

  • Crude (CL=F): +$0.30 (+0.32%) to $95.34 a barrel

  • Gold (GC=F): +$17.00 (+0.89%) to $1,926.20 per ounce

  • 10-year Treasury (^TNX): +2.8 bps to yield 2.1880%

NEW YORK, NEW YORK - MARCH 16: Traders work on the floor of the New York Stock Exchange (NYSE) on March 16, 2022 in New York City. The Dow started off the day in positive territory, extending yesterday's rally.  (Photo by Spencer Platt/Getty Images)

NEW YORK, NEW YORK – MARCH 16: Traders work on the floor of the New York Stock Exchange (NYSE) on March 16, 2022 in New York City. The Dow started off the day in positive territory, extending yesterday’s rally. (Photo by Spencer Platt/Getty Images)

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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