Nasdaq jumps 2.5% as US stocks soar after the Fed ramps up fight against inflation with 75-basis-point rate hike

• US stocks jumped to a strong finish Wednesday following the Federal Reserve's policy meeting.
• The Fed raised interest rates by 75 basis points to battle high inflation.

US stocks soared Wednesday after the Federal Reserve ratcheted up its key interest rate by 75 basis points while Chairman Jerome Powell said a move of that size shouldn't be common as it continues to battle high inflation.

The S&P 500 and the Dow Jones Industrial Average notched their first wins after five consecutive losses. Equities held to gains after May retail sales released early Wednesday unexpectedly fell 0.3% as inflation accelerated.

Later, the Federal Open Market Committee raised the fed funds rate to a range of 1.25% to 1.75%, the first three-quarter-point rate hike since 1994 when Alan Greenspan was chairman. The vote was 10-1, with Kansas City Fed President Esther George preferring an increase of 50 basis points.

"Clearly, today's 75-basis-point increase is an unusually large one, and I do not expect moves of this size to be common," said Powell during his afternoon press conference. "From the perspective of today, either a 50-basis-point or a 75-basis-point increase seems most likely at our next meeting."

Here's where US indexes stood at 4:00 p.m. on Wednesday:

• S&P 500: 3,789.99, up 1.46%

• Dow Jones Industrial Average: 30,668.53, up 1.00% (303.70 points)

• Nasdaq Composite: 11,099.15, up 2.5%

Fed's big increase came after data last week showed inflation rose to a 41-year high of 8.6% in May.

"After Friday's CPI report, the Fed needed to prove once again it was serious about fighting inflation," with the rate hike of 75 basis points, said Barry Gilbert, asset allocation strategist at LPL Financial in a note. "The more aggressive stance can still be consistent with a softish landing for the economy, but the path is getting narrower."

"We still think the Fed may be able to back off from its new forecast of a 3.4% benchmark rate at the end of the year, but for now the priority is showing resolve," he wrote.

Around the markets, the ECB is preparing a new anti-crisis tool to confront a surge in bond yields.

Russia's oil export revenue jumped in May to a pre-war level of $20 billion as prices surged, said the IEA

Oil prices were mixed. West Texas Intermediate crude lost 1.9% at $116.64 per barrel. Brent crude, the international benchmark, rose 0.9% to $119.58.

Gold, widely considered an inflation hedge, rose 1.6% to $1,842.40 per ounce. The 10-year yield dropped 13 basis points to 3.34%.

Bitcoin turned higher, up 0.1% to $22,016.01.