Dow was off 142, decliners over advancers 3-2 & NAZ slid back 85.  The MLP index stayed in the 218s & the REIT index fell 3+ to the 388s.  Junk bond funds were mixed & Treasuries saw only limited selling.  Oil rose 2+ to the 77s & gold finished down 1 to 1823 in volatile trading (more on both below). 

AMJ (Alerian MLP Index tracking fund)

Fed raises interest rates half a point to highest level in 15 years

>Long Covid has contributed to more than 3,500 deaths in the U.S. since start of pandemic, CDC says

Tensions continue to escalate between the US & China as the Biden administration prepares to blacklist a prominent Chinese chip manufacturer, Yangtze Memory Technologies, along with 35 other companies based in the PRC, according to a new report.  The Commerce Dept plans to add China's largest memory chip maker to an "Entity List" early next week.  Being added to the list makes it difficult for companies to receive items from US suppliers.  Therefore, all 31 of these Chinese organizations had to prove within 60 days that their business activities did not put US national security at risk.  It is noted that China's gov did cooperate with the Commerce Dept in order to avoid the blacklist.  The move will likely further escalate tensions between the world's 2 largest economic superpowers amid global inflation & stagnation.  Moreover, Yangtze Memory is China's largest chip manufacturer, supplying American companies such as Samsung.  An official in the Commerce Dept noted in Nov that Yangtze & other Chinese companies were at risk of being blacklisted.  In Oct, nearly 3 dozen Chinese organizations were put on an unverified list by Commerce because authorities in the US could not prove these companies were not supporting China's military.

US to reportedly blacklist over 30 Chinese companies

Gold futures ended lowe, then fell even further after the Federal Reserve announced a 0.5 percentage point increase to its benchmark interest rate.  Gold for Feb fell $6 (0.4%) to settle at $1818 an ounce after ending yesterday at its highest since late Jun.  After the Fed announcement, which came after the settlement, prices were trading at $1812.  Prices for gold finished today’s session with a loss, then extended those losses into the electronic trading session after the Fed announced a hike in the fed funds rate of 50 basis points to 4.25-4.5% as expected.  Fed officials penciled in 5.25% as the top end for its benchmark rate.  That's higher than their forecast of 4.75% in Sep.   The FOMC’s decision to raise rates by 50 basis points, departing from the previous 4 increases of 75 basis points, was largely offset with its hawkish comments accompanying the announcement.  Those comments conveyed the Fed's continued concern about elevated levels of inflation & its desire to raise rates longer & to a higher level than previously forecasted.  That increases investor expectations of continued aggressive Fed monetary policy and pushing gold prices lower.  The Fed announcement will be followed by the latest rate decisions from the Bank of England & the ECB with both of them forced to raise rates, even if this increases the risk of recession in both regions.

Gold settles lower, extends losses after Fed decision

Oil futures finished higher, finding support after the Intl Energy Agency raised its 2022 & 2023 forecasts for oil demand growth.  Data from the Energy Information Administration revealed a 10.2M-barrel weekly rise in US crude inventories.  However, a decline in Gulf Coast exports due to a temporary disruption at the Houston Ship Channel contributed to the supply increase.  Oil prices modestly pared their gains after the Federal Reserve raised its benchmark interest rate by 0.5 percentage point & also penciled in 5.25% as the top end for its benchmark rate.  The fear is that the Fed's restrictive policy stance could ease the demand for oil & keep prices under wraps.  The US benchmark WTI crude for Jan rose $1.89 (2.5%) to settle at $77.28 a barrel, the highest finish since Dec 2.

Oil Futures End Higher as Traders Weigh Demand, Supplies and Fed Decision

This was a wild day for stocks.  Investors were bullish early on.  However, Powell's comments were not well received.  The ½ point increase in the interest rates was widely expected.  But the top end for the interest rate was not well received.  The immediate reaction was to sell stocks in the Dow & trading was choppy in the last of hour of trading.  Traders will have a lot to think about tonight & bullish thinking may have been reduced.

Dow Jones Industrials