Market Flux Event
Fed Raises Rates 25 Basis Points to 3.75%-4% for First Time in Three Years, Dow Drops 600 Points
Read this in the Market Flux appThe Federal Reserve raised its benchmark interest rate by 25 basis points to a target range of 3.75%-4% on September 16, marking its first rate hike in more than three years and signaling that further tightening is likely. Fed Chair Warsh said the economy has strengthened but that inflation remains elevated with little improvement, a message that rattled investors who had hoped for a more measured outlook.
U.S. stocks reversed earlier gains following the decision. The Dow Jones Industrial Average fell roughly 1.2%, or about 600 points, while the S&P 500 dropped approximately 0.45% and the Nasdaq finished roughly flat. Money markets moved quickly to price in additional tightening, with traders assigning roughly a 50% probability to another rate hike as soon as October.
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Sources
- Seeking AlphaWall Street trades lower after the FOMC's latest rate hike
- DeItaoneSTOCKS DROP AS FED HIKES AND SIGNALS MORE TIGHTENING U.S. stocks reversed earlier gains after the Fed delivered its first rate hike in more than three years and signaled further tightening is likely. The S&P 500 fell 0.43% and Dow dropped 1.17%, while the Nasdaq finished roughly flat. Warsh said the economy has strengthened but inflation remains elevated with little improvement.
- FirstSquawkWALL STREET STOCKS FELL AFTER THE FEDERAL RESERVE RAISED ITS BENCHMARK RATE BY 25 BASIS POINTS TO 3.75%–4%, MARKING ITS FIRST HIKE IN THREE YEARS. THE S&P 500 DROPPED 0.45%, WHILE THE DOW FELL 1.2%, AS TRADERS INCREASED BETS THAT THE FED COULD DELIVER ANOTHER HIKE, WITH MONEY MARKETS PRICING ROUGHLY A 50% CHANCE OF AN OCTOBER MOVE.
- InvestingWall St ends lower after Fed hikes interest rates, sees more tightening ahead
- MarketWatchFed rate hike fails to calm troubled markets as Dow falls 600 points. Expect more sharp swings in stocks and bonds.