Wall Street rose higher in the middle of this week. Wednesday (26/1) at
22.00 WIB, the Dow Jones Industrial Average rose 1.45% to 34,797. The
S&P 500 index advanced 1.38% to 4,416. The Nasdaq Composite rose 2.45%
to 13,873.
A scintillating outlook from Microsoft puts US stock indexes on track for
two volatile trading days and ahead of the outcome of the Federal Reserve's
policy meeting.
Microsoft Corp's share price rose 5.3% in opening trade after forecasting
earnings for the first three months of 2022 to be broadly above market
estimates. This projection is driven by the cloud business. Chipmaker Texas
Instruments Inc. rose 4.6% on also providing a strong outlook.
The positive outlook lifts tech-related stocks. Shares of Meta Platforms,
Apple Inc, Google owner Alphabet Inc, Amazon.com, Advanced Micro Devices and
Nvidia Corp rose between 2.1% and 4.4%.
Rate-sensitive technology and growth stocks have recently been rocked by
fears of the Fed's aggressive action to fight inflation. Rising geopolitical
tensions around Russia and Ukraine are also weighing on markets.
The Fed's policy decision is due at 2pm local time with the US central bank
expected to signal the start of a rate hike cycle starting in March.
The announcement will be followed by Fed Chair Jerome Powell's press
conference for clues on the size and pace of gains for this year and a
strategy to shrink the central bank's balance sheet by about $9 trillion.
Traders expect a 25 basis point hike in the Fed Funds Rate in March and
three more hikes near the end of the year.
"We're going to get some clarity around the path of a rate hike which can
certainly calm the market and reduce volatility," Mike Skillman, chief
executive officer at Faith Investor Services told Reuters.
"When interest rates rise, valuation becomes more important so profit
becomes more important. From a market perspective, profit will improve,"
said Skillman.
The fourth quarter reporting season is underway. According to Refinitiv,
analysts expect S&P 500 earnings to grow 24.1% year-on-year
