The Impact of Fed Rate Hikes on Tech Company Stock Prices: Microsoft as an Example

Abstract

This paper analyzes, from a third-person perspective, the impact of the fiscal and monetary policies adopted by the United States since the outbreak of the COVID-19 epidemic in 2020 on the international financial market and the stock prices of large, listed companies, with a particular focus on the impact of the Fed's interest rate hike on the stock price of Microsoft Corporation. Through time series analysis methods, including ARIMA model, the study reveals the short-term effects of the interest rate hike policy on the U.S. dollar exchange rate and Microsoft's stock price. The results show that the interest rate hike significantly affects Microsoft's stock price, demonstrating the profound impact of macroeconomic policy changes on the micro market. This study not only fills the gap of specific case studies on the impact of the Fed's interest rate hike but also provides new perspectives for understanding the impact of macroeconomic policies on individual firms' stock prices. The study emphasizes the need for investors and policymakers to consider the potential impact of macroeconomic policy changes on the stock market. For investors, this means considering future trends in monetary policy when making investment decisions, and for policymakers, taking into account the impact of policy adjustments on the stability of international financial markets, particularly on the stock prices of major global firms, when adjusting policies to promote the healthy development of the global economy.