After the Federal Reserve announced it will maintain interest rates but signalled another increase was coming, stocks fell on Wednesday.
To 4,402.20, the S&P 500 fell 0.94%. A more than 2% decrease in Microsoft and approximately 3% drops in Nvidia and Alphabet, the parent company of Google, contributed to the Nasdaq Composite’s 1.53% decline to 13,469.13. The Dow Jones Industrial Average dropped 34.440.88 points, or 0.62%, to lose 76.85 points.
The three main indices ended the session at session lows.
Rates were maintained by the Fed, as was generally expected. But in its economic estimates, the central bank stated that a further rate hike is anticipated before the year is out. The central bank indicated it would stop raising rates after that hike and start decreasing them the next year, but it would maintain rates at a higher level than it had indicated in June for the entire year.
While investors listened to Fed Chair Powell discuss his expectations for rates, the markets shook. The Fed chairman underlined that there is still work to be done in the fight against inflation while stating that the central bank would “proceed carefully” in raising rates.
Powell also said that a gentle landing for the economy was still a possibility and that it was his main goal, but not his base case. During Powell’s speech and the last 30 minutes of trade, the three major indices fell.
Senior market analyst at Oanda Edward Moya stated, “The US economy is too strong and this rate increasing cycle will run a lot longer than Wall Street wants.”
Source (CNBC)
