Investor Optimism Declines Slightly Following Fed's Rate Hike

The CNN Money Fear and Greed index showed slight easing in overall market sentiment following the announcement of Fed’s interest rate decision.

The Federal Reserve raised its target fed funds rate by 0.5% on Wednesday. “Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures,” the Fed said in a statement.

The Dow closed lower by around 142 points to 33,966.35 on Wednesday. The S&P 500 fell 0.61% to 3,995.32, while the Nasdaq Composite fell 0.76% to settle at 11,170.89 in the previous session.

Jabil Inc. JBL, Adobe Inc. (NASDAQ: ADBE) and Quanex Building Products Corporation NX are set to report quarterly earnings today.

At a current reading of 60.0, the index remained in the "Greed" zone, compared to a previous reading of 61.0.

What is CNN Business Fear & Greed Index?

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.