Stock futures inch higher after Fed raises rates by most since 1994

cnbc.com:

U.S. stock index futures were modestly higher during overnight trading on Wednesday after the Federal Reserve implemented the largest interest rate hike since 1994.

Futures contracts tied to the Dow Jones Industrial Average added 0.22%. S&P 500 futures were up 0.23%, while Nasdaq 100 futures advanced 0.29%.

The major averages ended Wednesday's session higher, with the Dow and S&P 500 both snapping five-day losing streaks. The 30-stock benchmark added about 304 points, or 1%, while the S&P 500 advanced 1.46%. The tech-heavy Nasdaq Composite was the relative outperformer, rising 2.5%.

The Federal Reserve on Wednesday announced a 75 basis point rate hike, which had been widely anticipated by the market.

«Clearly, today's 75 basis point increase is an unusually large one, and I do not expect moves of this size to be common,» Federal Reserve Chairman Jerome Powell said at a news conference following the decision.

Stocks took a leg higher after Powell said that a 50 or 75 basis point increase «seems most likely» at the next meeting in July, indicating the central bank's commitment to fighting inflation. Powell did caution, however, that decisions will be made «meeting by meeting.»

Individual members' forecasts show that the Fed's benchmark rate is now on track to end the year at 3.4%.

«At this point the market has done much of the Fed's work for them in terms of stocks and bonds selling off over the past week – not to mention the entire year – so it's not that surprising that both markets moved higher today (stock and bond prices higher; bond yields lower), given that they had sold off so much coming into today's meeting,» said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance.

Wharton's Jeremy Siegel