By Yasin Ebrahim

Investing.com – The S&P 500 cut losses to close sharply higher Wednesday, underpinned by a rebound in tech stocks after the Federal Reserve said it would accelerate its taper and projected the first liftoff in rates next year.  

It was at 4,709.85. The rose 1.1% or 383 points and then the additional 2.1%.

It announced that it would taper its bond purchases by $30Billion per month beginning January. That’s double the pace of $15Billion monthly in November. 

It was decided to move forward the timeline for rate rises. There are three rates hikes next year. Three more will be in 2023. The Fed’s benchmark rate is now 1.6%. 

“We are confident in our prediction of three rate increases [in 2022]Commerzbank confirmed that the second quarter (spring) was the most likely to be the first. 

Risk sentiment improved following the announcement as a faster taper and earlier path to monetary policy tightening was largely priced in ahead of the Fed meeting. 

Google-parent Alphabet (NASDAQ:), Microsoft (NASDAQ:), Facebook (NASDAQ:), and Apple (NASDAQ:), which combined make up more than fifth of the broader S&P 500, cut their losses and sparked a broader market rebound.

The rebound was also influenced by consumer discretionary. Tesla (NASDAQ) saw its losses reduced as investors rediscovered their interest in growth stocks.   

After Eli Lilly, the drug giant raised its earnings outlook to 2021 and predicted further strength in 2022, health stocks rose by 8%.

Although oil prices have fallen, energy continued to be under pressure as supply was outpacing demand. This is despite growing concern about Omicron travel threats and eventual fuel demand.

Devon Energy (NYSE:), Occidental Petroleum, (NYSE:), Diamondback Energy, (NASDAQ:), fell over 2%.