Stocks spent most of the day lower as investors awaited the conclusion of the Federal Reserve’s two-day policy meeting, but saw a short-lived rise after the central bank issued its fourth hike. consecutive rates of 75 basis points (one basis point equals 0.01%).
What triggered this brief reversal was the dovish language of the Fed’s statement that the central bank will take into account “the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and the inflation, and economic and financial developments”. In other words, the Fed could reduce the size of its future rate hikes if the data confirms that inflation is slowing.
Many great minds on Wall Street weighed in after the Fed’s rate hike, including Mike Loewengart, head of portfolio construction at Morgan Stanley Global Investment Office. “Investors seem to accept the Fed’s acknowledgment that the work they’ve done will take time to integrate, which could be interpreted as the most painful hikes are behind us,” Loewengart said. “Keep in mind, however, that the Fed remains adamant that its decisions will be based on hard data – most importantly, clear signals that inflation is finally on a downward trajectory. So while hikes are likely still on the horizon, what the Fed says is now as important as what the Fed does.”
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Major stock indexes posted gains ranging from 0.7% to 1.1% immediately after the central bank’s decision, but fell sharply after Fed Chairman Jerome Powell said at his conference of press that it was “very premature” to think about suspending the rate. hikes. At the close, the Dow Jones Industrial Average was down 1.6% to 32,147, the S&P 500 Index was 2.5% lower at 3,759, and the Nasdaq Compound was down 3.4% to 10,524.
Top Energy ETFs to Consider as Oil Prices Rise
One of the forces in the market today was oil prices, with US crude futures climbing 1.8% to $90 a barrel. Oil prices are now up more than 17% from their lows in late September, near the $77 a barrel mark.
What’s behind the recovery? “Demand appears to have strengthened, judging by declines in US stocks,” says Susannah Streeter, senior investment and market analyst at Hargreaves Lansdown. “American Petroleum Institute figures showed crude inventories fell 6.5 million barrels last week, contradicting forecasts that there would be a buildup instead.” Streeter also points to unconfirmed speculation of a change in China’s zero COVID policy, “which would also support commodity prices, given how demand has been weakened during repeated shutdowns.”
Whatever the reason, continued gains in crude futures could certainly benefit these top energy stocks, while the energy exchange-traded funds (ETFs) that hold them and others would also reap the rewards. Here we have compiled some of the best energy ETFs to gain exposure to oil and gas stocks. Check them.