Wall Street Gains as Fed Holds Rates Steady; Oil Surges on Saudi Refinery Attack
Wall Street indices closed higher on Wednesday after the Federal Reserve kept interest rates steady at 3.75%-4%. Tech earnings, strong performance from Oracle, and a surge in oil prices following a Saudi refinery attack drove market sentiment.
Wall Street closed Wednesday's trading session with moderate gains following the Federal Reserve's decision to leave interest rates unchanged. All three major indices advanced, with the Dow Jones Industrial Average adding 0.19%, the S&P 500 rising 0.28%, and the Nasdaq Composite strengthening by 0.27%.
The Dow gained 97.53 points to close at 52,475.10, the S&P 500 added 21.37 points to finish at 7,743.97, and the Nasdaq climbed 72.04 points to 26,549.85. At the center of the trading day was the central bank's rate decision, which kept the benchmark interest rate target range at 3.75%-4%, in line with expectations, in a 10-2 vote.
Economic Outlook and Fed Policy
The Federal Reserve upgraded its assessment of the U.S. economy while signaling that inflation remains elevated. Chair Kevin Warsh stated following the decision that the central bank stands ready to act as needed, with discussions during the two-day meeting centering primarily on persistent price pressures.
Market reaction was subdued, though forward-looking expectations shifted. According to CME's FedWatch tool, markets priced in an 85% probability of a 0.25 percentage point rate hike at the December meeting, up from 78.3% a day earlier. Meanwhile, Wall Street's fear gauge, the VIX, dropped 4.22% to 16.78.
Tech Earnings and Market Movers
Simultaneously, investors awaited quarterly reports from two major tech giants, Microsoft and Alphabet, which released their results after the closing bell. Microsoft beat forecasts for cloud revenue, pushing its stock slightly higher in after-hours trading, while Alphabet shares declined after heavy expenditures led to higher-than-expected cash burn.
According to reports, Microsoft's revenue for the July-September quarter rose 19% to $92.3 billion, while Alphabet posted a 25% increase in revenue to $127.6 billion. Oracle was among the standout performers of the session, surging nearly 11% after issuing a revenue forecast of $225 billion for fiscal year 2030.
Commodities Surge on Middle East Supply Concerns
Crude oil prices saw sharp upward movements following an attack on an oil refinery in Saudi Arabia, which revived concerns over potential supply disruptions in the Middle East. Brent crude futures gained 1% to settle at $115.32 a barrel, while U.S. benchmark crude surged 3% to $102.78 a barrel.
Precious metals moved in mixed directions. U.S. gold futures for December delivery fell 0.6% to $4,051.60 per ounce, whereas spot gold prices edged up 0.27% to $4,070.28 per ounce.
