What happened
Shares of Apple(NASDAQ:AAPL)climbed nearly 3% on Wednesday, following the Federal Reserve's statement.
So what
The Federal Reserve plans to taper its asset purchases at a faster rate to combat rising inflation. The announcement came after wholesale prices surged a record 9.6% in November.
This tapering positions the Federal Reserve to begin raising interest rates next year. Members of the Federal Open Market Committee forecast three rate hikes in 2022.
While a reduction in stimulus measures and the prospect of rate hikes are not normally bullish indicators for stocks, the announcements were largely in line with the market's expectations. Investors appeared to breathe a sigh of relief that the Federal Reserve wasn't planning more aggressive action to battle inflation, and the major stock indexes surged.
Now what
The news allowed investors to shift their attention away from macroeconomic factors and refocus on Apple's core business fundamentals and growth prospects -- two areas where the tech titan shines.
A 5G upgrade cycle is fueling iPhone sales, while rave reviews of Apple's high-performance M1 chip are boosting sales of Macs and iPads. Together, these trends are likely to drive the tech giant's already huge profits even higher.
Additionally, analysts are intrigued by Apple's virtual and augmented reality initiatives, as well as its secretive self-driving car project. Their excitement is palpable, and several analysts have recently raised their price forecasts for Apple's stock due in part to the potential of these new products.
With today's Fed statement and subsequent market rally seemingly signaling that it's ok to buy great growth stocks once again, many investors decided to purchase shares of Apple, and its stock price rose in kind.