Fed Raises Rates Again, U.S. Stocks Rebound on Inflation Fears

On Wednesday, September 16, U.S. stocks modestly rose following the Federal Reserve's decision to raise its benchmark interest rate by 25 basis points.

The move marked the Fed's first rate increase since 2023 and was widely expected. The S&P 500 increased around 0.3% to 0.4%, while the Nasdaq Composite gained roughly 0.7% to 0.8%. The Dow Jones Industrial Average remained close to flat, reflecting a mixed response among economically sensitive blue-chip stocks.

The Federal Open Market Committee increased the federal-funds target range from 3.50%-3.75% to 3.75%-4.00%, as all 12 voting members backed the quarter-point increase. The decision aimed to moderate demand and curb inflation, which has exceeded its 2% target for more than five years.