Stock Market Today: Stocks Post-Fed Pop Reverses After Powell Takes the Mic

It was a volatile session on Wall Street as investors parsed over the Fed's latest policy statement and Powell's presser.

Fed Chair Jerome Powell press conference
(Image credit: Getty Images)

Stocks spent most of the day lower as investors awaited the conclusion of the Federal Reserve's two-day policy meeting, but enjoyed a short-lived burst higher after the central bank issued its fourth straight 75 basis point rate hike (a basis point equals 0.01%). 

What sparked that brief turnaround was dovish language in the Fed's statement that said the central bank will consider "the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments." In other words, the Fed could cut back on the scale of its future rate hikes if data confirms inflation is easing.

Many of Wall Street's top minds chimed in after the Fed rate hike, including Mike Loewengart, head of portfolio construction at Morgan Stanley Global Investment Office. "Investors seem to be embracing the Fed's acknowledgment that the work they have done will take time to sink in, which could be interpreted as the most painful hikes are behind us," Loewengart says. "Keep in mind though 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 path. 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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The major market indexes enjoyed gains ranging from 0.7% to 1.1% in the immediate aftermath of the central bank's decision, but swung sharply lower after Fed Chair Jerome Powell said in his subsequent press conference that it was "very premature" to think about pausing rate hikes. At the close, the Dow Jones Industrial Average was off 1.6% at 32,147, the S&P 500 Index was 2.5% lower at 3,759, and the Nasdaq Composite was down 3.4% at 10,524.

Top Energy ETFs to Consider as Oil Prices Rise

One pocket of strength in the market today were oil prices, with U.S. crude futures climbing 1.8% to $90 per barrel. Oil prices are now up more than 17% from their late-September lows near the $77 per-barrel mark. 

What's behind the upswing? "Demand appears to have strengthened, if the drawdowns in U.S. inventories are anything to go by," says Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown. "Figures from the American Petroleum Institute showed that crude stocks fell by 6.5 million barrels last week, bucking forecasts that there would be a build-up instead." Streeter also points to unconfirmed speculation of a change to China's zero-COVID policy, "which would also be supportive of commodity prices, given how demand has been weakened during repeated lockdowns." 

Whatever the reason, continued gains in crude futures could certainly benefit these top energy stocks, while energy exchange-traded funds (ETFs) that hold them and others would also reap the rewards. Here, we've compiled some of the best energy ETFs to gain exposure to oil and gas stocks. Check them out.

Karee Venema
Contributing Editor, Kiplinger.com

With over a decade of experience writing about the stock market, Karee Venema is an investing editor and options expert at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at Schaeffer's Investment Research. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.