The Federal Reserve on Wednesday announced its widely expected decision to raise interest rates by another 75 basis points. Citing efforts to achieve maximum employment and inflation at the rate of 2 percent over the longer run, the Fed announced its decision to raise the target range for the federal funds rate to 3.75 to 4 percent. The Fed also said that ongoing increases in rates will be 'appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time.’ However, the central bank noted that future rate hikes will 'take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.’ The change in the language from the Fed comes following recent reports some officials are becoming increasingly uneasy about the pace of interest rate increases and the impact on the economy.

The Switzerland stock market ended higher on Wednesday, shrugging off a mild setback that pushed it briefly into the red around midafternoon. The benchmark SMI, which climbed to 10,864.62 around late morning after a steady start, ended with a gain of 22.58 points or 0.21% at 10,806.23. The index touched a low of 10,766.77. Roche Holding, Lonza Group and Swisscom gained 1 to 1.3%. Geberit climbed 0.75%, while Novartis, Zurich Insurance Group and Nestle gained 0.5 to 0.55%. Sonova ended 3.3% down. Richemont and Credit Suisse both dropped nearly 2%. Alcon declined 1.52%. UBS Group, Swiss Re, ABB, Holcim and Sika lost 0.5 to 0.79%. In the Mid Price Index, AMS surged 6.75% and Bachem Holding climbed 3.6%. SIG Combibloc gained nearly 2%. Tecan Group, Dufry, Barry Callebaut and Zur Rose also closed notably higher. Flughafen Zurich ended 3.4% down, while Lindt & Spruengli and Temenos Group ended lower by 1.3% and 1.1%, respectively.

European stocks closed lower on Wednesday with investors largely making cautious moves, digesting earnings and economic news. The DAX lost 0.6 per cent to 13,257 points, the Euro-Stoxx-50 fell by 0.8 per cent to 3,622 points. Moeller-Maersk was very weak, down 5.8 per cent. The outlook is weighing on the logistics company. Novo Nordisk rose by 7.4 per cent after reporting strong results. Meanwhile, shares in Aston Martin slumped 15.3 per cent. The group posted double its third-quarter 2021 loss and lowered its guidance. Meanwhile, Ferrari slipped 1.6 per cent despite better third-quarter figures. Teamviewer had grown significantly in the third quarter, and the software provider also increased profitability considerably. Vonovia lost 5.6 per cent after Moody's lowered its rating by one notch. The Norma share rose by 2.4 per cent. The analysts at Baader highlighted the strong sales growth and the slightly improved EBIT margin as positive factors. Fielmann edged 1.9 per cent lower following a profit warning for the current year. The eyewear provider now sees sales for the current year at 1.75 billion euros after 1.8 billion so far. The pre-tax result is now expected to be over 160 million euros, compared to 190 million so far.

Stocks sank Wednesday after the Federal Reserve again sharply raised interest rates and hinted at a possible slowdown in the pace of increases but indicated it still has work to do in its fight against inflation. The Dow Jones Industrial Average dropped 505.44 points, or 1.5%, to 32147.76, giving up a gain of more than 400 points earlier in the afternoon. The S&P 500 fell 96.41 points, or 2.5%, to 3759.69, and the technology-focused Nasdaq Composite lost 366.05 points, or 3.4%, closing at 10524.80. All 11 sectors in the S&P 500 posted declines of more than 1%. The consumer-discretionary, technology and communication-services groups - home of the growth stocks that are most sensitive to rising rates - dropped more than 3%. Corporate earnings season so far has proved to be a mixed bag. Some of the U.S.’s biggest banks reported results that were better than feared, but other market heavyweights, most notably big technology companies, have disappointed investors. Match Group shares rose $1.84, or 4.2%, to $45.74 after it posted stronger-than-expected revenue and profit. After the market closed, mobile-phone chip supplier Qualcomm said it sees the smartphone slump worsening. Its shares fell more than 6% in after-hours trading. Online-trading broker Robinhood Markets reported a narrower-than-expected loss, pushing its shares up more than 3% after hours. Advanced Micro Devices (-1.7%) on Tuesday night reported third-quarter revenue in line with expectations, after lowering its forecast last month due to lower demand for personal computers. The chipmaker said it expects fourth-quarter revenue to rise 14% to about $5.5 billion. CVS Health (+2.4%) and Walgreens Boots Alliance (-1.2%) agreed to pay more than $10 billion to settle community lawsuits in the US related to the opioid crisis. Cosmetics group Estée Lauder (-8%) on Wednesday reported higher-than-expected adjusted earnings for its first quarter of the year but gave a lower-than-consensus outlook for the current quarter.

Stocks in Asia mostly fell, with Hang Seng in Hong Kong down 2.4% and China’s Shanghai Composite slipping by an average of 0.4%. The South Korean Kospi holds its ground after initially heavy losses. Meanwhile, the Tokyo Stock Exchange is closed on Thursday for a holiday; in Shanghai and Hong Kong, pharmaceutical stocks are among the biggest losers. Cansino Biologics declined by 9.3 per cent in Shanghai. The company's Covid inhalable vaccine will not add significantly to profits, Cansino announced. CSPC Pharma is down 9.6 per cent in Hong Kong. China Unicom's shares are up 3 per cent after the telecoms company revealed the formation of a joint venture with a subsidiary of Tencent Holdings (-2.7 per cent).

Long-dated U.S. government debt yields turned higher on Wednesday, with the policy-sensitive 2-year rate finishing the New York session at an almost two-week high, after Federal Reserve Chairman Jerome Powell told reporters that it is “very premature” to be thinking of a pause in interest rate hikes. The 10-year Treasury note ended up 3 basis points at 4.08%. The 2-year Treasury note rose less than 6 basis points to 4.599%.

DZ Bank lowers Swisscom target to CHF 440 (450) - Sell
Deutsche Bank cuts Geberit target to CHF 470 (495) - Hold
Jefferies reduces Nestlé target to CHF 95 (100) - Underperform

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