Fed Raises Rates for First Time Since 2023 Amid Inflation Concerns

The U.S. Federal Reserve raised interest rates by 25 basis points to 3.75%-4% on Wednesday, marking its first rate hike since 2023.

The move was made amid elevated inflation and a strong job market, with the Fed projecting underlying inflation reaching 3.4% this year, up from the prior estimate of 3.3%. Gross domestic product expansion is expected to reach 2.3%, up from the previous projection of 2.2%.

Stock futures pared most losses and posted minor gains after the rate hike announcement, with Dow Jones Industrial Average futures advancing 13 points, or 0.03%, S&P 500 futures up 0.06%, and Nasdaq-100 futures adding 0.1%. The broader market had ended lower on Wednesday, with the S&P 500 down 0.5%, the Nasdaq 100 flat, and the Dow Jones Industrial Average easing 1.2%.

Key stocks in focus included United Airlines Holdings (UAL), Intel Corp. (INTC), Apple (AAPL), SK Hynix (SKHY), and Alphabet Inc. (GOOGL). The semiconductor sector saw gains, with the VanEck Semiconductor ETF (SMH) and the iShares Semiconductor ETF (SOXX) adding above 1%.