Markets rise as Fed raises rates

Markets mostly rose on Wednesday.

The S&P 500 rose 0.8 percent and the STOXX Europe 600 rose 0.4 percent. However, the MSCI Asia Pacific Index finished little-changed.

The Federal Reserve raised its benchmark rate by 25 basis points on Wednesday, a move that failed to dampen investor sentiment.

Indeed, Tomi Kilgore at MarketWatch wrote that investors should celebrate as “interest rates and the stock market usually trend in the same direction over the long term”.

Nevertheless, Goldman Sachs has downgraded its outlook on equities to neutral from overweight over the next three months.

“The asymmetry for equities is turning increasingly negative,” Christian Mueller-Glissmann, an equity strategist at Goldman Sachs, said in a report. “High equity valuations alone are not a reason for drawdowns in the short term, if they reflect stable or improving macro conditions; but they indicate elevated drawdown risk,” he added.