Stocks on Wall Street are solidly higher in afternoon trading Wednesday after the Federal Reserve raised its key interest rate by a widely expected three-quarters of a point as the central bank ratchets up its campaign to quell surging inflation.

The Fed’s move, its second three-quarters of a point hike in row, raises its benchmark short-term rate to the highest level since 2018.

The S&P 500 was up 1.5%, little changed from where it was right before the 2 p.m. Eastern release of the Fed policy statement. The benchmark index’s latest gains more than make up for its losses from a day earlier. The Dow Jones Industrial Average was up 0.4% and the technology-heavy Nasdaq Composite was up 2.6%.

Smaller company stocks also gained ground, lifting the Russell 2000 by a percent.

Bond yields were mixed. The two-year Treasury yield, which tends to move with expectations for the Fed, rose to 3.08% from 3.06% late Tuesday. The 10-year yield, which influences mortgage rates, fell to 2.77% from 2.79%.

Wall Street had correctly predicted the size of the hike, which is triple the usual size and the Fed’s fourth rate hike this year.

Such increases make borrowing more expensive, slowing the economy. The hope is that the Fed and other central banks can deftly find the middle ground where the economy slows enough to whip inflation but not enough to cause a recession.

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The central bank’s decision comes as inflation has accelerated to 9.1%, the fastest annual pace in 41 years.

The move could mean less pressure on stocks, particularly tech stocks and others seen as relatively expensive.

Technology and communication services stocks accounted for a big share of the S&P 500′s gains. Nvidia rose 5.4% and Netflix added 4%.

Stocks have been choppy this week following solid gains last week that were mainly fueled by better-than-expected reports on corporate profits.

Inflation remains at the forefront of investors’ minds, however. Markets were spooked Monday after retail giant Walmart warned that its profits are being hurt by rising prices for food and gas, which are forcing shoppers to cut back on more profitable discretionary items such as clothing.

The retailer’s profit warning in the middle of the quarter was rare and raised worries about how the highest inflation in 40 years is affecting the entire retail sector.

Investors kept an eye on the latest batch of corporate earnings reports Wednesday, including strong earnings from Google’s owner Alphabet and Microsoft.

Shares in Microsoft and Google parent Alphabet rose 5.1% and 6.8%, respectively, after their latest quarterly reports. Boeing shares slipped 0.8% despite the aerospace company reporting it delivered more planes in the first quarter than it has since the start of the pandemic.

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Retailers, restaurant chains and other companies that rely on direct consumer spending also helped lift the market. Chipotle Mexican Grill jumped 12.7% after the restaurant chain reported second-quarter earnings that beat analysts’ forecasts.

Spotify Technology vaulted 11.5% after the music streaming service reported monthly active user and premium subscriber numbers that exceeded the Street’s expectations.

Investors will get quarterly results from Ford Motor Co. as well as Facebook’s parent company Meta Platforms after the closing bell.