S&P 500 Surges Over 1% Following Fed Decision: Investor Fear Eases, Greed Index Remains In 'Extreme Fear' Zone

The CNN Money Fear and Greed index showed some improvement in the overall market sentiment, while the index remained in the “Extreme Fear” zone on Wednesday.

U.S. stocks settled higher on Wednesday, with the S&P 500 surging more than 1% during the session. The Federal Reserve maintained the federal funds rate unchanged at a range of 4.25% to 4.5%, with Chairman Jerome Powell reviving the term “transitory” to describe the potential inflationary effects of new tariffs.

While the Fed still projects two rate cuts in 2025 in its latest dot plot, projections now reflect lower growth and higher inflation, fueling renewed concerns about stagflation.

Nvidia Corp. NVDA rose 1.8%, snapping a two-day losing streak, following CEO Jensen Huang’s keynote speech the previous day. The Boeing Co. BA surged around 7% after CFO Brian West outlined plans to boost aircraft deliveries and reduce first-quarter cash outflows, supported by improved factory efficiency and inventory reductions.

On the economic data front, U.S. mortgage applications declined by 6.2% in the second week of March, following a cumulative 37% increase from the two prior weeks.

All sectors on the S&P 500 closed on a positive note, with energy, information technology, and consumer discretionary stocks recording the biggest gains on Wednesday.

The Dow Jones closed higher by around 383 points to 41,964.63 on Wednesday. The S&P 500 rose 1.08% to 5,675.29, while the Nasdaq Composite climbed 1.41% at 17,750.79 during Wednesday’s session.

Investors are awaiting earnings results from Accenture plc ACN, Micron Technology Inc. MU, and FedEx Corp. FDX today.

What is CNN Business Fear & Greed Index?

At a current reading of 22.4, the index remained in the “Extreme Fear” zone on Wednesday, versus a prior reading of 20.2.

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

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