Dow plummets more 500 points after Fed rate-hike announcement

- Advertisement -


Wall Street’s main indexes were seen falling in the last 30 minutes of trading on Wednesday, as investors absorbed the Federal Reserve’s latest rate hike and future policy commentary.

- Advertisement -

The Dow Jones Industrial Average fell 522.45 points, or 1.7%, to end at 30,183.78. The S&P 500 lost 66 points, or 1.7%, to 3,789.93, while the Nasdaq Composite fell 204.86 points, or 1.80 points, to 11,220.19.

At the end of its two-day meeting, the Fed raised its policy rate for the third time by 75 basis points to a range of 3.00-3.25%. Such growth was expected by most market participants, with only a 21% chance of the 100 bps rate increase seen before the announcement.

advertisement

However, policymakers signaled a much bigger increase to come in the new projections, raising their policy rate to 4.40% by the end of the year to top 4.60% in 2023. This is up from June’s estimates of 3.4% and 3.8%, respectively. ,

It is not expected to cut rates until 2024, the central bank said, prompting any outstanding investors to expect the Fed to bring inflation under control in the near term.

- Advertisement -

Markets went back and forth following the announcement at 2 p.m. ET as investors digested the news, with a mix of expected and slightly-unexpected, respectively, as to the size of the rate hike and the path to future growth.

However, the decline intensified in the last 30 minutes of trading.

“Based on the inflation report and recent gubernatorial comments, the markets were already ready for some flurry,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management.

“But it is always interesting to see how the market reacts to the messaging. Hawkishness was to be expected, but while some take comfort from it in the market, others take a sell position.”

Credit: nypost.com /

- Advertisement -

Recent Articles

Related Stories