Stocks Recover from Rate Hike as Treasury Yields Fall

The US Federal Reserve raised interest rates by 0.25% on Wednesday, September 16, to combat stubborn inflation that has remained above the Fed's 2% target for over five years.

Fed Chairman Kevin Warsh stated 'the plain fact is that inflation is too high, and has been for too long' during a press conference following the announcement.

The rate hike aims to address inflation, which worsened since the start of the war in the Middle East.

Stocks initially declined after the announcement on Wednesday, with the Dow Jones shedding over 600 points and ending the day down 1.2%.

However, stocks reversed course on Thursday morning, opening higher with the Dow Jones climbing 410 points or 0.8%, the S&P 500 gaining 1.2%, and the Nasdaq jumping 1.5%.