NVIDIA Corp (NASDAQ: NASDAQ:NVDA) shares are trading higher Wednesday as the overall market rises following the Federal Reserve's rate hike announcement.
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."
See Also: Federal Reserve Raises Interest Rates by 0.75%, Hikes Inflation Estimates: What Investors Need To Know
A pullback in treasury yields has also helped lift stocks. 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 3.34% at time of publication.
NVDA Price Action: Nvidia has traded between $346.47 and $154.12 over a 52-week period.
The stock was up 4.75% at $165.82 at press time, according to data from Benzinga Pro.
Photo: courtesy of Nvidia.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Read at Benzinga