Stocks traded modestly higher ahead of this afternoon's policy decision from the Federal Reserve. Prior to the announcement, individual stock news held investors' attention, with Delta Air Lines (DAL) rising 2.8% after the air carrier said it expects adjusted earnings per share to double and revenue to soar 20% in fiscal 2023. Additionally, SoFi Technologies (SOFI) jumped 6.1% after a regulatory filing showed CEO Anthony Noto bought $5 million shares in the fintech firm. However, gains for the major market indexes quickly disappeared after the Fed decision.
Specifically, the Federal Reserve, as expected, lifted its benchmark interest rate by 50 basis points – marking a slowdown to the 75 basis point rate hikes it issued at the last four meetings. However, the central bank's "dot plot" – which summarizes the outlook of each individual official for the federal funds rate – indicated the potential to hike rates by an additional 75 basis points in 2023 and not begin to cut rates until 2024.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"The Fed did not welcome the disinflation trends that have just started to emerge and focused on robust job gains and elevated inflation," says Edward Moya, senior market strategist at currency data provider OANDA. "Any hopes of a soft landing disappeared as the Fed seems like they are committed to taking rates much higher."
At the press conference following the Fed decision, Chair Jerome Powell affirmed that "ongoing increases will be appropriate" to reach price stability. The central bank chief added that based on dot plot projections, central bankers "overwhelmingly … believe inflation risks are to the upside."
The major market indexes, which were up roughly 0.7% ahead of the decision, were all down by more than 1% as Fed Chair Powell took the stage. Stocks erased some of these losses into the close, but the Dow Jones Industrial Average still finished down 0.4% at 33,966, the S&P 500 Index shed 0.6% to 3,995, and the Nasdaq Composite gave back 0.8% to 11,170.
Can These 3 Stocks Beat the Market?
Today's wild swings in reaction to the Fed decision just shows how difficult it has been to be an investor throughout 2022. And with an uncertain economic backdrop still looming, it's likely the challenging market environment will continue into the new year.
Still, the volatility creates exciting opportunities for stock pickers. And while deep pocketed players like Warren Buffett have access to research and insights that help them anticipate which stocks to buy and sell during big market swings, most retail investors do not.
Enter Danelfin. The analytics platform harnesses the power of big data technology and machine learning to analyze hundreds of fundamental, technical and sentiment data points per day for 1,000 U.S.-listed shares and 600 European-listed firms, then generates several stock picks that it views as highly likely to outperform the market over the next 30 to 90 sessions.
So, what does Danelfin say investors should be buying now? These three dividend stocks are at the top of the platform's list of high scorers.
-
Tech Sells Off While Trump Stirs the Fed: Stock Market TodayWe've reached another important part of earnings season, though markets remain captivated by the president, the Fed, and interest rate policy.
-
We bought a vacation home for retirement, but we never use it. Should we sell, or rent it out and wait for mortgage rates to come down?We ask financial planning experts for advice.
-
Trump-Era Regulations Will Broaden Access to CryptoThe Kiplinger Letter The president wants to make the U.S. the leader in digital assets.
-
July CPI Report Boosts Rate-Cut Odds: What the Experts SayThe July CPI report shows that tariffs are having a slight impact on inflation, though not enough to keep the Fed from cutting interest rates.
-
What Tariffs Mean for Your Sector ExposureNew, higher and changing tariffs will ripple through the economy and into share prices for many quarters to come.
-
How Big Will the Fed Rate Cut Be This Fall?A dismal July jobs report has lifted expectations for fall rate cuts. How low could the fed funds rate be by year's end?
-
July Jobs Report Renews Rate-Cut Hopes: What the Experts Are SayingThe July jobs report shows weakening in the labor market and lifts expectations for a September rate cut.
-
Should You Buy These ETFs Before the Fed Cuts Rates?The Fed is likely to lower interest rates this fall, and tactical investors might want to look closer at these ETFs before rate cuts resume.
-
How to Invest for a Fall Interest Rate Cut by the FedA lot can happen between now and then, but the probability the Fed cuts interest rates in September is back above 80%.
-
Stocks Rise After Trump-Powell Fed Tour: Stock Market TodayNvidia hit a new all-time high intraday, but another renowned semiconductor name and some less iconic stocks were bigger movers Friday.
