Stocks tumbled in volatile trading on Wednesday after the US Federal Reserve (Fed) raised interest rates by 75 basis points, predicting an even bigger rate hike in the fight to contain surging inflation.
The Dow Jones Industrial Average fell 522.45 points (1.7%) to close at 30,183.78. The S&P 500 was down 1.71% at 3,789.93 and the Nasdaq Composite was down 1.79% at 11,220.19.
The S&P ended Wednesday’s session down more than 10% in the past month and down 21% from its 52-week high. Even before the interest rate decision, stocks priced in an aggressive tightening campaign by the Fed that could have plunged the economy into recession.
Stocks were volatile as traders analyzed the interest rate decision and the latest comments from Powell’s press conference. At its all-time high, the Dow is up over his 314 points.
The Federal Reserve (Fed) has said it expected a widely anticipated 75 basis point rate hike, with the so-called terminal rate reaching 4.6% to combat persistently high US inflation. rice field. That is the rate at which the central bank ends its tightening regime. The central bank also indicated that it plans to remain aggressive by raising interest rates to 4.4% by next year.
“You can only steer your ship into the storm for a very long time, but eventually you have to break through the hatch and the Fed has hiked rates by 75 basis points three times in a row in the last four months. At , market participants should see: Charlie Ripley, senior investment strategist at Allianz Investment Management, said:
Government bond yields have made headlines. His two-year rate, which has reached its highest level since 2007, jumped to his 4.1%. The 10-year rate jumped to a high of about 3.6% on the day.
All major S&P 500 sectors ended the session in negative territory, leading to losses driven by consumer discretion, telecom services, materials and a number of growth stocks. Travel and entertainment stocks also took a hit, with big tech stocks such as Apple, Amazon and Meta Platforms crashing.