Amazon.com Inc (NASDAQ:AMZN) shares surged Wednesday following the Federal Reserve's rate hike announcement.
What To Know: In an effort to tame rising inflation, the Fed raised interest rates by three-quarters of a percentage point, representing the most aggressive rate hike since 1994.
"Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher energy prices, and broader price pressures," the central bank said.
Wednesday's rate hike brings the target range for the federal funds rate up to 1.5% to 1.75%. Aiming to achieve maximum employment and a 2% inflation rate over the long term, the Fed said it anticipates that ongoing increases in the target range will be appropriate.
The Fed noted that Russia's invasion of Ukraine and COVID-related lockdowns in China, which are likely to exacerbate supply chain disruptions, are putting additional upward pressure on inflation.
"The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals."
A pullback in treasury yields also helped lift stocks Wednesday afternoon. Lower rates increase the present value of future cash flows, which can positively impact the valuations of growth stocks. The 10-Year Treasury yield was hovering around 3.31% at time of publication.
AMZN Price Action: Amazon shares are down more than 11% over the last week.
The stock closed Wednesday up 5.24% at $107.67, according to data from Benzinga Pro.
Photo: courtesy of Amazon.
