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This afternoon the Federal Reserve raised its benchmark interest rate by 75 basis points to a range of 2.25% to 2.50%. It was the second straight 75 basis don’t increase and the fourth increase in interest rates this year.

Stocks soared. The Standard & Poor’s 500 closed up 2.62% and the Dow Jones Industrial Average ended up 1.37%. The NASDAQ Composite gained 4.06 and the NASDAQ 100 finished ahead by 4.26%. The small-cap Russell 2000 added 2.39% at the close.

And why? you might well ask.

Let me posit three reasons.

First, the market was reassured by the strength of the Fed move that the central bank is committed to fighting 9% inflation.

Second, the Fed said another 75% basis point increase might be on the table for September, but the Fed said the size of the move would depend on the economic data. The financial markets took this to mean that the Fed wasn’t likely to raise by 75 basis points. The odds of a 75-basis-point hike by the Fed in September actually fell in the Fed Funds Futures market after the Fed’s news.

Third, Fed chair Jerome Powell said the economy isn’t yet in recession and might be able to avoid a recession. A soft landing, where the Fed raises rates by just enough to whip inflation but not by enough to send the economy into a recession, remains the fervent hope of a chunk of Wall Street. (Unlikely as it is that the Fed has this kind of superpower.)

(In addition, I’d note a reason for the tech stock rally: If the economy is slowing and inflation remains high, tech companies represent the best hope for outgrowing a slowdown.)

I’d note that the market’s gains came ahead of disappointing news from Meta Platforms (META), AKA Facebook, and chip maker Qualcomm.

Tomorrow is, as they say, another day.

And tomorrow brings earnings from Apple (AAPL) and Amazon (AMZN) after the close of trading.