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Dow rises 518 points after Federal Reserve announces interest rate hike

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The Dow Jones Industrial Average gained 518.76 points on Wednesday after the Federal Reserve announced its first interest rate hike since 2018. File Photo by John Angelillo/UPI | <a href="/News_Photos/lp/85cc6ff949daf827f9cc36c1cb8b1e19/" target="_blank">License Photo</a>
The Dow Jones Industrial Average gained 518.76 points on Wednesday after the Federal Reserve announced its first interest rate hike since 2018. File Photo by John Angelillo/UPI | License Photo

March 16 (UPI) -- U.S. markets climbed Wednesday after the Federal Reserve announced the first in a series of seven planned interest rate hikes.

The Dow Jones Industrial Average gained 518.76 points, or 1.55%, while the S&P 500 rose 2.24% and the Nasdaq Composite closed the day up 3.77%.

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At the conclusion of its two-day policy meeting on Wednesday, the Fed voted to increase short-term interest rates by a quarter of a percentage point -- its first hike since 2018 -- while also scheduling additional interest rate hikes for its six remaining meetings this year.

Markets dipped in the immediate aftermath of the announcement but rallied in the final 30 minutes of trading.

"The market seems to be taking today's news in stride which means it likely priced in today's announcement accordingly," Mike Lowengart, E-Trade's managing director of investment strategy, said, accoriding to CNBC. "And let's not forget that monetary tightening means the Fed believes the economy is on solid footing, which is a good thing at the end of the day."

The 10-year treasury note rose 2.8 basis points to about 2.18, its highest level since 2019 following the Fed's statement.

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Bank stocks posted gains following the announcement with JPMorgan Chase rising 4.45% and Bank of America climbing 3.11%.

West Texas Intermediate cruise dropped below $95 per barrel after it had fallen into bear market territory as prices fell 20% from recent closing highs, but rose more than 1% intraday.

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