Banks Lead US Stock Rally After Fed Announces Tapering
On Wednesday afternoon, Ben Bernanke and the Federal Reserve announced tapering earlier than some analysts expected, as the US economy picks up its pace. Stocks didn’t shy away from the news, though. In fact, they rallied, led by banks like JP Morgan Chase, Wells Fargo WFC +3.07%, and Bank of America BAC +3.36%.
The S&P 500 finished up 1.67% on the day, with all of that rise coming after 2pm EST. Banks led the way, reacting strongly to the Fed’s news. The KBW Bank Index jumped 2.12%, with JP Morgan Chase up 2.73%, Wells Fargo up 3.07%, U.S. Bancorp up 2.56%, Bank of America up 3.36%, and Citigroup C +2.51% up 2.51%
In the hours leading up to Bernanke’s announcement, each of those large-cap banks had flat-lined or sunk.
While many observers worried that the Fed’s tapering could cause the stock market to take a dive, the opposite occurred. The S&P 500 had its biggest gains in months and the Dow Jones Industrial Average (up 1.84%) surpassed its previous record close.
Read more about the Fed’s move from Forbes markets reporter Samantha Sharf.
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