Suddenly: Despite the Fed’s hawkish decision, the stock market soars

After the Fed’s policy statement expected three interest rate hikes in 2022, technology stocks moved higher in Wednesday afternoon trading. The Dow Jones Industrial Average rose 0.4%, led by Cisco Systems, Inc. (CSCO), with an increase of nearly 3%. In the massive sell-off in the technology sector, Cisco stock performed well because it remained above key support levels. Its trading price is also close to the 58.73 buy point.

As expected, the Fed accelerated the pace of reduction. Asset purchases will now be reduced by $30 billion per month and may end in March.

The Dow Jones Index is currently testing the support level of its 50-day moving average, while the S&P 500 Index remains above its 50-day antenna. The S&P 500 index rose 0.5%, but Eli Lilly (LLY), Fortinet (FTNT) and Pfizer (PFE) outperformed the market in the benchmark index. With the help of bullish earnings guidance, Eli Lilly's stock rose 9% and cleared 271.21 points.

Procter & Gamble (PG) and UnitedHealth Group (UNH) also outperformed the market in the Dow Jones Index today, but both stocks have risen too far to be considered for buying. With the sharp sell-off of growth stocks, P&G stocks belong to a large group of consumer staples stocks that have performed well in the current market.

The 10-year U.S. Treasury bond yield rose 3 basis points to 1.47% in early trading, but fell back from a high to 1.45%.

After falling below the 50-day line on Tuesday, the Nasdaq Composite Index rose 0.3%. The Nasdaq 100 index performed well on its 50-day line on Tuesday. Invesco QQQ Trust (QQQ) rose 0.3%, led by strong performance of leading stock Advanced Micro Devices (AMD), which rose 2.5%

Cadence Design Systems (CDNS), a component of the Nasdaq 100 index, rebounded after gaining support on Tuesday's 50-day line. The stock price rose 1.5%.

The best performing ETFs on Tuesday included the Utilities Select Sector SPDR Fund (XLU) and the Healthcare Select Sector SPDR Fund (XLV), which rose 1.1% and 0.9%, respectively. Real estate and consumer staples stocks also outperformed the broader market.

In MarketSmith Growth 250, the contract research agency Icon (ICLR) broke the trend line and rose by about 3%. The stock is still in a 12-week consolidation.

The Fed moves the stock market higher; these leaders signal a buy

The highest-rated oil and gas producers fell the most, with companies such as Danbury (DEN), Mulan Oil and Gas (MGY) and Devon Energy (DVN) falling by at least 4%. The benchmark WTI crude oil futures rose slightly to US$70.90 per barrel.

The Innovator IBD 50 ETF (FFTY) rose slightly after falling nearly 2% during the session. Arista Networks (ANET) hit a new high in the IBD 50, but Roblox (RBLX) plummeted nearly 12% after the company issued guidance on the average daily active user bookings, and is expected to fall by 8%-9% year-on-year.

Due to the bearish price trend of leading growth stocks, IBD pushed the stock market to a correction on December 3. At the same time, the Nasdaq index has been trending downwards since the beginning of November.

Today is the eighth day when the Nasdaq Composite Index and S&P 500 are trying to rebound. The following day, or a sharp increase in the volume of the index, will confirm the new upward trend and give the green light to start buying stocks again. But it may take longer for the new settings to appear. The recent stock market sell-off has caused damage to many stock charts.

Read the big picture every day to keep up with the market direction and leading stocks and industries.

Follow Ken Shreve on Twitter @IBD_KShreve for more stock market analysis and insights.

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2:22 PM Eastern Time Despite the Fed's unexpected hawkishness, the stock market rose on Wednesday. AMD and Nvidia rebounded strongly.

At 2:22 pm Eastern time, despite the surprising hawks, the stock market rose on Wednesday...

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Note: The information contained herein is not and should not be construed as an offer, solicitation or recommendation to buy or sell securities. The information was obtained from sources we believe to be reliable; however, no guarantee or implication is made as to its accuracy, timeliness or completeness. The authors may own the stocks they discuss. Information and content are subject to change without notice.

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