The Dow Jones Industrial Average rose 383 points on Wednesday as the Federal Reserve offered investors some clarity about its upcoming monetary policy. File Photo by John Angelillo/UPI | License Photo
Dec. 15 (UPI) -- U.S. markets closed the day in the green Wednesday as investors received clarity on the Federal Reserve's monetary policy moving into 2022.
The Dow Jones Industrial Average gained 383.25 points, or 1.08%, while the S&P 500 rose 1.63% and the Nasdaq Composite closed the day up 2.15% after all three indexes were in negative territory before the central bank shared its plans.
The Federal Reserve's Federal Open Market Committee announced it would slowly begin curtailing the monthly pace of its net asset purchases by $20 billion for Treasury securities and $10 billion for agency mortgage-backed securities.
It also forecasted three interest rate hikes in the next year followed by further increases in 2023 and 2024.
Jim Caron, a chief strategist on the global fixed income team at Morgan Stanley Investment Management, described the announcement as a "sigh of relief to the equities market."
"Now I have seen how high rates are going and how fast it's going to happen. The uncertainty is removed from the market. From an equity perspective, now they just have to focus on earnings, margins and growth," Caron said.
Apple stock rose 2.85%, Microsoft gained 1.92% and Netflix increased 1.18% as tech stocks rallied for a second consecutive day.
Large bank stocks moved in the opposite direction following the Fed news as JPMorgan Chase slid 0.74% and Bank of America dipped 0.41% in the face of the oncoming interest rate hikes.
Shares of Pfizer gained 5.87% after the company said its antiviral pill, Paxlovid, "significantly reduced" the chances of being hospitalized or dying from COVID-19 by 89% for high-risk adult patients within three days of symptom onset.
Wednesday also saw the release of Commerce Department data showing retail spending increased by 0.3% in November well short of the 0.8% growth expected by economists.