US Market drops after Fed rates hike

The US stock market finished session lower on Wednesday, 22 March 2023, as profit booking resumed late afternoon after flattish move much of the session due to the US Federal Reserve announcement of another rate hike by 25 basis points this year.

At the close of trade, the Dow Jones Industrial Average index declined 530.49 points, or 1.63%, to 32,030.11. The S&P500 index dropped 65.90 points, or 1.65%, to 3,936.97. The tech-heavy Nasdaq Composite Index declined 190.15 points, or 1.6%, to 11,669.96.

All 11 S&P500 sectors ended lower. Real estate was worst performing sector, declining 3.64%. Meanwhile, financials (down 2.37%), consumer discretionary (down 2.2%), energy (down 2.1%), and utilities (down 2%) sectors were notable losers.

 

The Federal Reserve on Wednesday raised interest rates by another 25 basis points to 4.75% to 5%, but indicated it was on the verge of pausing further increases in borrowing costs after the recent collapse of two US banks.

The central bank's latest projections suggest the Fed plans to raise rates just one more time this year to a range of 5% to 5.25%.

The continued increase in rates comes as the Fed noted inflation remains elevated, with the central bank seeking to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time.

The continued increase in rates comes as the Fed noted inflation remains elevated, with the central bank seeking to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2% over time.

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