Business Highlights: Fed inflation fight, rally in stocks

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Fed attacks inflation with its largest rate hike since 1994

WASHINGTON (AP) — The Federal Reserve intensified its drive to tame high inflation by raising its key interest rate by three-quarters of a point — its largest hike in nearly three decades — and signaling more large rate increases to come that would raise the risk of another recession. The move the Fed announced after its latest policy meeting will increase its benchmark short-term rate, which affects many consumer and business loans. The central bank is ramping up its drive to tighten credit and slow growth with inflation having reached a four-decade high of 8.6%, spreading to more areas of the economy and showing no sign of slowing.

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Stocks rally after Fed’s big rate hike to fight inflation

NEW YORK (AP) — Stocks rallied in a roller-coaster day of trading on Wall Street Wednesday after the Federal Reserve hiked interest rates by the biggest margin since 1994, but also said such mega-hikes would not be common. The Fed did signal that more increases are on the way as it tries to tackle the worst inflation in four decades. The increase of three-quarters of a percentage point was three times as big as the central bank usually makes. The S&P 500 rose 1.5% after several sudden moves up and down immediately after the Fed’s announcement. Treasury yields fell.

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Biden tells oil refiners: Produce more gas, fewer profits

President Joe Biden wants U.S. oil refiners to produce more gasoline and diesel. In a letter to refiners Wednesday, Biden says their profits have tripled during a time of war between Russia and Ukraine as Americans struggle with record high prices. Biden writes the oil companies need to work with his administration on “near-term solutions” addressing the crisis. Gas prices nationwide average roughly $5 a gallon, an economic burden for many Americans and a political threat for Biden’s fellow Democrats before midterm elections. Biden’s message that corporate greed contributes to higher prices might resonate with voters. ExxonMobil says it has informed Biden’s administration of its planned investments to increase oil production.

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European Central Bank vows backstop against market turmoil

The European Central Bank has vowed to come up with a new, unspecified market backstop that could be used to buffer some countries against bond market turmoil similar to what shook the 19-country eurozone during a debt crisis more than a decade ago. The statement came after an unscheduled meeting of the bank’s governing council Wednesday. It aims to address a selloff in Italian and Spanish government debt in the wake of the bank’s decision to start raising interest rates in July for the first time in 11 years.

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Retail sales in May slip 0.3% amid surging inflation

NEW YORK (AP) — Americans trimmed their spending unexpectedly in May compared with the month before, underscoring how surging inflation on daily necessities like gas is causing them to be more cautious about buying discretionary items. U.S. retail sales fell 0.3% last month, down from a revised 0.7% increase in April. Sales at furniture and home furnishings stores fell 0.9%, while sales at food stores rose 1.2%. Business at restaurants was up 0.7%. The report offers discouraging news about the economy as consumers were still providing critical support to the economy even after a year of seeing prices spiral higher for gas, food, rent, and other necessities.

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China’s factory activity rebounds as anti-virus curbs ease

BEIJING (AP) — China’s factory output rebounded in May, adding to a recovery from the latest economic slump induced by COVID-19 curbs. Government data show industrial production rose 0.7% over a year earlier, recovering from April’s 2.9% contraction. Consumer spending edged up compared with April but was lower than a year ago. Exercising the ruling Communist Party’s “zero-COVID” strategy, authorities in Shanghai and other industrial cities shut down businesses and or imposed other restrictions starting in late March. That fueled fears global manufacturing and trade might be disrupted. The measures have mostly been eased across China, but economic activity is expected to need weeks to recover.

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US report: nearly 400 crashes of automated tech vehicles

DETROIT (AP) — Automakers reported nearly 400 crashes of vehicles with partially automated driver-assist systems, including 273 involving Teslas, according to new statistics from U.S. safety regulators. But the National Highway Traffic Safety Administration cautioned Wednesday against using the numbers to compare automakers, saying it didn’t weight them by the number of vehicles from each manufacturer that use the systems, or how many miles those vehicles traveled. Automakers reported crashes from July of last year through May 15 under an order from the agency, which is examining such crashes broadly for the first time.

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So long, Internet Explorer. The browser retires today

SAN FRANCISCO (AP) — Microsoft has officially sent Internet Explorer into retirement. As of Wednesday, Microsoft will no longer support the once-dominant browser that legions of web surfers loved to hate — and a few still claim to adore. Its launch in 1995 signaled the beginning of the end of the web’s first widely popular browser, Netscape Navigator. IE’s market share peaked in the early 2000s at over 90%. But it began to fade as users found faster, less crash-prone alternatives. Today, Google’s Chrome browser dominates with about 65% of the worldwide browser market share. IE’s heir, Microsoft Edge, lags with about about 4%.

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The S&P 500 rose 54.51 points, or 1.5%, to 3,789.99. The Dow Jones Industrial Average gained 303.70 points, or 1%, to 30,668.53. The Nasdaq added 270.81 points, or 2.5%, to 11,099.15. The Russell 2000 index of smaller companies advanced 23.31 points, or 1.4%, to 1,731.14.