Wall Street Stocks Drop as Federal Reserve Raises Interest Rates

Wall Street stocks declined Wednesday after the Federal Reserve lifted interest rates again, but signaled it could pause on additional hikes.

The Dow Jones Industrial Average finished a choppy session down 0.8 percent at 33,414.24.

The broad-based S&P 500 shed 0.7 percent to 4,090.75, while the tech-rich Nasdaq Composite Index lost 0.5 percent at 12,025.33.

The Fed raised its benchmark lending rate for a tenth consecutive time Wednesday, by another quarter-point, in a move that was widely expected by analysts.

The central bank said it would monitor economic conditions to determine if additional steps may be appropriate, modifying earlier language that suggested more strongly that higher rates were coming.

“We feel like we’re getting close, or maybe even there” when it comes to raising interest rates sufficiently to counter inflation, Fed Chair Jerome Powell said during a press conference.

But Powell also ruled out interest rate cuts in 2023, a comment that sent stocks lower in their final shift of the day.

“It feels like the market didn’t get everything it wanted but maybe got everything it could expect,” said Art Hogan, an analyst at B. Riley Financial, who characterized the decision as a “moderately dovish hike.”

But Steve Sosnick of Interactive Brokers said the market’s pullback reflected that “people have been coming around to the general consensus that this was more hawkish than the dovish.”

Regional banking shares, which have been under pressure following recent bank failures, ended the day lower, reversing earlier gains.

PacWest Bancorp lost 2.0 percent, KeyCorp declined nearly two percent and Zions Bancorporation fell 5.3 percent.

Among other companies, Starbucks sank 9.2 percent as the coffee chain reported better-than-expected results but offered a cautious forecast that disappointed investors.

Eli Lilly jumped more than six percent after releasing positive clinical results of a donanemab, a new treatment for early Alzheimer’s Disease.

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(This story has not been edited by News18 staff and is published from a syndicated news agency feed)