Wall Street didn’t exactly love the US interest rate hike on Wednesday.

The Federal Reserve raised rates for the first time in more than 3 years.

Initially, US shares headed lower as investors took in what the Fed had to say.

But that didn’t last long.

By Thursday, buyers were back.

The S&P 500 Index (SP: .INX) climbed 1.1%, while the Nasdaq Composite Index (NASDAQ: .IXIC) jumped 1.7% and the Dow Jones Industrial Average Index (DJX: .DJI) added 0.6%.

That led the S&P 500 and Nasdaq to their strongest sessions in around 6 weeks.

And Aussie investors could get a bit of that rebound, too, today.

S&P/ASX 200 Index (ASX: XJO) futures are pointing around 0.6% higher this morning after a rough few weeks.

Rates could still go higher

The thing is, the Fed hasn’t exactly gone soft.

Its benchmark rate now sits between 3.75% and 4%, and chair Kevin Warsh said getting inflation back towards 2% remains the priority.

So, there could be another hike coming as well.

The Fed’s latest projections showed 16 of 18 policymakers expect rates to rise at least once more this year.

Normally, that would make life a little harder for growth stocks, especially the big tech companies that helped drive Thursday’s rally.

So why were investors buying again?

Well, it seems that Wall Street is becoming a little more comfortable with higher rates, provided the US economy keeps holding up.

Oil is helping calm things down

Oil is starting to take a little pressure off as well.

Brent crude has fallen for a second straight session to currently US$104.14 a barrel, while WTI is at US$101.14.

Yes, that’s still expensive, but it is well off the levels we saw earlier in the week.

Saudi Arabia is reportedly trying to restore around half the capacity of its damaged East-West Pipeline within days. It’s expecting to be back at full operations within 6 weeks.

In addition, China has privately asked Iran to help rein in Yemen’s Houthis after Saudi Arabia sought Beijing’s support.

This seems to have eased some fears that the supply situation in the Middle East could get worse.

What does this mean for the ASX?

All of this gives the ASX 200 a better backdrop heading into today’s session.

Wall Street finished higher, oil has pulled back, and the US 10-year Treasury yield has dropped below 5%.

That should take a bit of pressure off our stock market for now.

The post Wall Street just shrugged off the Fed rate hike. Could the ASX 200 be next? appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Owning Coles Group Ltd (ASX: COL) shares has been a rewarding pick for investors seeking rising dividend payouts.

It’s understandable why the business has managed to deliver such a consistently growing dividend – a supermarket business selling food is a vital service and Australia’s population has steadily increased over the years.

FY26 was a prime example of how the business can deliver rising profit and larger dividends.

FY26 total revenue grew 2.8% to $45.6 billion, total underlying operating profit (EBITDA) rose 7.1% to $4.2 billion, underlying EBIT (another form of operating profit) rose 9.9% to $2.3 billion and underlying net profit after tax (NPAT) grew 13.7% to $1.25 billion.

This result allowed the Coles board of directors to hike the annual dividend per Coles share by 13% to 78 cents. Let’s take a look at what’s expected of the company’s dividend for the next few years.

FY27

We are currently in the 2027 financial year for Coles, with the supermarket business saying that its sales growth in the first eight weeks of FY27 was consistent with the fourth quarter of FY26. Its e-commerce penetration continues to be impressive and a significant driver of growth – this reached 15.7% over the period.

In the other divisions, liquor’s sales trajectory strengthened across the first eight weeks compared to the fourth quarter of FY26. Its convenience portfolio continued to deliver positive growth, while performance in the warehouse portfolio also improved.

Coles’ CEO Leah Weckert noted that the company has made significant progress over the last three years and it has a “strong plan for the year ahead to keep improving the customer offer, strengthen the business and support sustainable long term growth.”

According to the projection on Commsec, the business is projected to hike its annual dividend per Coles share by 7% to 83.5 cents. That’s a potential forward grossed-up dividend yield of 5.1%, including franking credits, at the time of writing.

FY28

The business is forecast to increase its annual dividend per share again in the 2027 financial year, which I’m sure is positive news for shareholders.

The projection on Commsec implies a possible year-over-year 6.3% increase of the annual dividend per share to 88.8 cents.

If owners of Coles shares do receive that dividend, it would be a grossed-up dividend yield of 5.4%, including franking credits, at the time of writing.

FY29

The best dividend of all could happen in the last year of this series of projections.

According to the projection on Commsec, the business could hike its FY29 dividend per share by 9.7% to 97.4 cents per share.

If that prediction comes true, then Coles would have a grossed-up dividend yield of 5.9%, including franking credits, at the time of writing.

There are not many ASX blue-chip shares that I think are as likely as Coles to continue hiking the dividend in the coming years, so it’s definitely one to look at for passive income investors.

The post Here’s the dividend forecast out to 2029 for Coles shares appeared first on The Motley Fool Australia.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

Drone company Innovaero Technologies Limited (ASX: INN) will list on the ASX next week after an initial public offer (IPO) which raised $40 million.

Australian defence force a key customer

The company’s prospectus said the company is focused on both crewed and uncrewed aircraft development and support systems.

Chair Vincenzo Di Pietro said in the prospectus:

As at the date of this Prospectus, the Company’s primary product is the OWL-B, a one-way loitering (OWL) munition system that forms part of the Company’s OWL family of systems, which is being developed in collaboration with the Commonwealth (Department of Defence) (DoD) via the Mission Talon-Strike Contract (refer to Section 7.1 for further details). In addition to the Company’s current and historic arrangements with the DoD for uncrewed aerial systems, the Company also derives revenue from its engineering, certification, composite manufacturing and MRO business.

Mr Di Pietro said a priority for the company would be advancing the development of the OWL family of systems, and in particular, “advancing the OWL-B system through remaining qualification and certification with the DoD with the objective of securing production contracts”.

The company would also be looking to expand into international markets in the UK, Japan, and the US, he said.

The company’s prospectus said it was looking to differentiate itself as an Australia-owned drone manufacturer.

The company said:

In Australia, the relevant market opportunity is significant compared with the United States and parts of Europe, particularly in relation to sovereign designed and manufactured armed drones and related interceptor capability. Historically, much of the defence market has been dominated by large primes and platform-centric acquisition models. However, the structural shift toward autonomous, attritable and scalable systems is increasing the role of specialist defence technology companies, such as the Company. The Company seeks to differentiate itself through sovereign capability, agility, and its unique (for its size) vertically integrated aerospace design/certification/manufacture capability.

Significant cash burn

The company’s financials, included in the prospectus, showed it generated revenue of $9.9 million in FY26 and made a net loss of $5.3 million.

The Innovaero Group was founded in 2006, before being formally incorporated in 2020.

The prospectus said:

Since then, its business and activities have evolved and expanded to include the delivery of integrated capabilities spanning complex aerial camera systems, mission-critical defence systems and high-value composite aerostructures for defence, aerospace, and adjacent industrial markets.

Following the capital raising, the executive director, Mike Von Bertouch, is expected to own 27.63% of the company.

The post Check out the ASX’s newest drone company appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.