- The S&P 500 rose above 4,700 again despite the Fed saying it expects to raise rates three times in 2022.
- Stocks enjoyed a “sell the rumor, buy the fact” reaction to the policy announcement and the Fed’s bullish outlook for 2022.
US equities rallied after the latest Fed policy announcement and the press conference following the meeting with Chairman Jerome Powell. The S&P 500 gained more than 1.6% to close above 4700, very close to record closing levels. Meanwhile, the Nasdaq 100 index rose more than 2.0% and easily fell back above the 16,000 level to around 16,300, while the Dow gained more than 1.0% and was on the verge of recovering to the 36,000 level. The VIX fell almost three points to just over 19.0.
Despite the Fed’s optimism, stocks soared, with the driver for this rally being unclear. Some cited a rumor sale and fact purchase. Namely, traders were cautiously positioning themselves in the lead up to the Fed meeting, and once the event risk was out of the way (despite being a bit more bullish than anticipated), the markets shed light. green to recover. Others pointed out that, with the last major US venture event now out of the way for 2021, the typical December “Christmas rally” may get underway.
Technical Levels
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