S&P 500 Rises 1% Following Fed Decision, Market Volatility Falls Sharply

The S&P 500 and the Nasdaq closed sharply higher on Wednesday following comments from Federal Reserve chair Jerome Powell.

The Fed on Wednesday raised its benchmark rate by 0.25%, marking the central bank's second consecutive policy downshift.

On the economic data front, the S&P Global US Manufacturing PMI was revised higher to 46.9 in January from a preliminary reading of 46.8, while private businesses in the US added 106,000 jobs in January.

Meta Platforms, Inc. META shares rose sharply in pre-market trading after the company reported better-than-expected sales for its fourth quarter and announced a $40 billion increase in its buyback authorization.

Majority of the sectors on the S&P 500 closed on a positive note, with information technology and consumer discretionary stocks recording the biggest surge on Wednesday. However, energy stocks bucked the overall market trend, dropping around 1.9% during the session.

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The Nasdaq 100 jumped 2.16% to close at 12,363.10 on Wednesday, amid gains in shares of Microsoft Corp MSFT and Tesla Inc TSLA.

The S&P 500 gained 1.05%, while the Dow Jones gained 0.02% to 34,092.96 in the previous session.

The Chicago Board Options Exchange's CBOE Volatility Index (VIX) fell 7.9% to 17.87 points on Wednesday.

What is CBOE Volatility Index?

The CBOE Volatility Index, popularly known as VIX, is a measure of the equity market's expectation of volatility based on S&P 500 index call and put options.

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