Close Update: Stocks Tumble Giving Up Early Gains After Fed Raises Interest Rates
Stocks tumbled after the Federal Open Market Committee raised interest rates by 0.25% and signaled more increases were on the way, sending major market indexes to their lowest levels in more than a year.
Recent economic data showing softening in the economy appeared to raise hope among some that the FOMC might pause. However, that didn’t happen Wednesday, and the committee said in its policy statement that “some further gradual increases” in rates “will be consistent with sustained expansion of economic activity, strong labor market conditions, and inflation.”
The selloff came after stocks managed to advance earlier in the session. The technology-stock heavy Nasdaq Composite Index led the major market gauges lower, falling 2.2%, while the Dow Jones Industrial Average and S&P 500 both fell 1.5%. So far this year, the Dow is down 5.6%, while the S&P 500 is off 6.2%. The Nasdaq is off 3.9%.
Worries over the economy have been a drag on the stock market in the latter part of the year. FedEx ( FDX ) didn’t help soothe those worries, as it lowered its earnings guidance for 2019 as global trade slows. FedEx fell 12%.
The consumer discretionary, technology, and industrial sectors were among the hardest hit Wednesday.
Dow Jones Industrial Average was down 351.98 points (-1.49%)
S&P 500 was down 39.20 points (-1.54%)
Nasdaq Composite Index was down 147.08 points (-2.17%)
FTSE 100 was up 0.96% to 6,765.94
Hang Seng Index was up 0.20% to 25,865.39
Shanghai China Composite Index was down 1.05% to 2,549.56
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