scorecardDow falls 505 point after Fed delivers another big rate hike and Powell signals commitment to inflation fight
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Dow falls 505 point after Fed delivers another big rate hike and Powell signals commitment to inflation fight

Jennifer Sor   

Dow falls 505 point after Fed delivers another big rate hike and Powell signals commitment to inflation fight
Stock Market2 min read
  • Stocks dropped on Wednesday after the Federal Reserve delivered another 75 basis point rate hike.
  • It's the fourth hike of that size this year as the central bank scrambles to tame inflation.

US stocks fell on Wednesday after the Federal Reserve delivered another 75-point rate hike, erasing gains made earlier on hopes a pivot by the central bank could be near.

All three indices ended the day in the red, with the Nasdaq Composite slipping by more than 3%.

The latest hike brings the fed funds rate to lie between 3.75% and 4%, the highest policy rate since 2008.

In a statement, Fed officials pointed to persistently high inflation and hot economic data. Job openings unexpectedly rose in the last JOLTS report, indicating the labor market is still running hot. But central bankers hinted they would potentially soften the pace of hiking in the future, leading some investors to price in odds of a 50 basis points hike in December.

"In determining the pace of future increases in the target range the committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation and economic and financial developments," the statement said, reiterating the Fed's commitment to get inflation back down to its 2% target.

Here's where US indexes stood at the 4:00 p.m. closing bell on Wednesday:

Despite renewed hope for Fed easing, market commentators warned the central bank would continue hiking into 2023.

"Fed officials are alert to how risks to global growth and financial stability may impact the US economy, however, we think their near-term priority will be addressing the greater perceived challenge of restoring price stability," Goldman Sachs strategist Gurpreet Gill said in a statement.

"Investors should not get ahead of themselves," Lazard chief stock strategist Ronald Temple warned. "This is not an environment in which the Fed will pivot or signal a pivot. To do so would be malpractice, and the Fed knows that. In December, the Fed will have two more inflation reports and two more jobs reports. Then, perhaps, the FOMC can signal a deceleration in tightening, but not before."

Here's what else is happening today:

In commodities, bonds, and crypto:




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