Stocks surge after Fed decision, tech sees a bump

Yahoo Finance Live’s Julie Hyman discusses stock market gains after the Fed announced a 50 basis point rate hike.

Video transcript

- All of the sectors that we've also seen impacted as well here. We saw some movement across various sectors following that Fed announcement. Homebuilders, banks, tech. They were spurred by the rate hike announcement as well as Powell's comments shooting down a 75 basis point hike at the moment. So, Julie, you're monitoring these moves back at the interactive. So what are we seeing this morning?

- I've hopped out of my chair. I'm back over here. So I want to talk about the overall moves first of all. And sort of building on the discussion we were just having, there's also been some commentary, was Powell pandering to the market with this taking that 75 basis points off the table to some extent? We saw that dramatic, dramatic reaction.

And, listen, typically when you have these kinds of commentary, you get a little bit of back and forth in the markets. We didn't have-- we had a little bit of back and forth while he was speaking. But then it was just up, up, and away. And that, of course, was true for all of the major averages, having the biggest gains since we saw in 2020.

The NASDAQ in particular had the biggest gain on a magnitude basis in percentage. It was up by 3%. And as we've talked about this morning, all of those moves are reversing. Not by the same magnitude, to be sure. But they're pulling back a little bit. Let's also talk about what's happening with the 10-year yield and the 10-year note here. The two day looks a little wonky.

But effectively what you had was once again it hitting 3% yesterday, then coming back down. Right now at 2.95%. So when we talk about financial conditions tightening and loosening, the Fed wants to tighten those financial conditions. This reflects that they're not quite getting as tight. They're not up to 3%, for example. So that's something that continue to watch. And then when we talk about the sectors here that we were watching in the S&P 500 yesterday and what was on the move.

Here is the intraday move yesterday. All of the groups were higher. You had energy prices-- energy stocks the highest, seeing the biggest gains. Tech and communication services. And, you guys, these groups, I mean, we also had real estate up the least, for example, utilities because they can be hurt as rates go higher. But tech has been so, so sensitive to all of this interest rate talk. So it's interesting that they saw the biggest gains.

- Yeah. It's interesting too we're now starting to see a slowdown in the housing market. It's hard to figure out what to believe. Do you go out there and trade these homebuilder stocks on fears of less rate hikes? But the market itself is slowing down because of what the Fed has already started to do a couple of months ago.

- Yeah. I mean, I don't know what you do with homebuilder stocks because the thinking would be demand perhaps would still be there. I don't know. I don't know.

- But then they still face the same supply chain issues as well. Delivery of those homes has been an issue for Lennar, for KB Homes, for Toll Brothers. All of them have continued to point this out. And that gets back to the supply chain part of the conversation and what type of demand destruction we may be seeing on that front too.

- They cannot fix everything, the Fed.