Why Apple Stock Rallied After The Recent Interest Rate Hike

$Apple(AAPL.US)$ There is a primary reason why the Federal Reserve has been raising rates in the US: to fight inflation. As much as high rates can hurt economic growth, rising consumer prices may be even worse for the economy and the markets.
One hypothesis is that investors have started to celebrate the Federal Reserve’s intervention to curb inflation. Chairman Jerome Powell himself said that he sees some signs of slowly stabilizing prices.
On the other hand, especially if inflation does come under control in the foreseeable future, investors may appreciate that this round of interest rate hikes may be closer to the end than to its beginning. Because the equities market looks ahead several months when pricing stocks, the tone could be finally shifting to modestly bullish in the second half of 2022.
Lastly, Apple has been executing superbly recently, even though global economic growth has been decelerating this year. In the company’s fiscal Q3 earnings call, CEO Tim Cook said that the iPhone at least, if not also the iPad and Mac, have not been suffering from reduced demand.
Investors may understand that, even in an unfavorable macroeconomic scenario, Apple is still likely to deliver the goods. This may explain why the S&P 500 has been down around 15% so far this year, but Apple stock has pulled back less than 10%.
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