US Stocks Swing Sharply Lower
US stocks swung lower on Wednesday after the Federal Reserve raised interest rates by 25bps, as expected. The S&P 500 fell 1% and the Dow dropped 1.5%, while the Nasdaq 100 fell 0.5%. Median projections by FOMC members reflected one or two additional hikes expected for this year, aligned with upward revisions to projections on inflation and GDP growth, in tandem with the view of lower unemployment for the upcoming years. In the meantime, FOMC Chairman Warsh struck a hawkish rhetoric by prioritizing the fight against inflation and reiterating that current gauges remain high, a reversal from previous speeches that signaled action against prices while downplaying the funds rate as preferred policy tool. Credit-sensitive sectors fell sharply, with Bank of America, Wells Fargo, and Citi falling 4%. AI hyperscalers also retreated with Microsoft, Alphabet, and losing more than 1%.
US stocks swung lower on Wednesday after the Federal Reserve raised interest rates by 25bps, as expected. 5%. Median projections by FOMC members reflected one or two additional hikes expected for this year, aligned with upward revisions to projections on inflation and GDP growth, in tandem with the view of lower unemployment for the upcoming years. In the meantime, FOMC Chairman Warsh struck a hawkish rhetoric by prioritizing the fight against inflation and reiterating that current gauges remain high, a reversal from previous speeches that signaled action against prices while downplaying the funds rate as preferred policy tool.
Credit-sensitive sectors fell sharply, with Bank of America, Wells Fargo, and Citi falling 4%. AI hyperscalers also retreated with Microsoft, Alphabet, and losing more than 1%.