US stocks fell in volatile trading Wednesday afternoon as the US Federal Reserve (Fed) dealt with yet another large rate hike in its stubborn fight against inflation.
The US Central Bank raised its benchmark policy rate by 0.75% for the third consecutive time, bringing the Federal Funds rate from its current range of 2.25% to 2.5% to a new range of 3.0% to 3.25%, the highest level since 2008. raised to .
The S&P 500 and Dow Jones Industrial Average each fell about 1.7%, while the technology-focused Nasdaq Composite fell 1.8%. Meanwhile, the CBOE Volatility Index (^VIX) – Wall Street’s “fear” gauge – briefly surged above 30 for the first time since July 1st.
“Restoring price stability is essential to maximizing employment and setting the stage for long-term price stability,” Fed Chairman Jerome Powell said in his post-meeting address. “We will keep doing it until we are confident the job is done.”
In the aftermath of the policy announcement, attention was focused on activity across the bond market. Treasury yields continued their perilous rise on Wednesday, with his rate-sensitive two-year Treasury bond surpassing his 4.1%, the highest level since 2007. The benchmark 10-year US Treasury bond rose above 3.5%, its highest level since 2011.
“You can only steer your ship into the storm for a very long time, but eventually you have to break through the hatch and the Fed has hiked rates by 75 basis points three times in a row in the last four months. So market participants should see that: “Overall, policy actions today are largely driven by the economy,” Charlie Ripley, senior investment strategist at Allianz Investment Management, said in a report. It reflects the background and the Fed clearly has to be aggressive to slow the economy.”
On Wednesday, General Mills (GIS) moved the market after reporting better-than-expected quarterly results and raising its full-year sales outlook after benefiting from higher prices for breakfast cereals, snack bars and pets. , up nearly 6%. food.
Beyond Meat (BYND)’s share price has given up its early gains after announcing a partnership with Taco Bell (YUM) on its first menu collaboration, Beyond Carne Asada Steak. The news comes after meat substitute producer Doug Ramsey, chief operating officer (COO), was suspended after being arrested for allegedly blowing a man’s nose during an altercation this weekend. I was.
Elsewhere, Stitch Fix (SFIX) stock rose nearly 3% after the company disappoints its fourth-quarter earnings forecast and sales guidance, reporting a decline in active customers.
Across the Atlantic, Russian President Vladimir Putin announced a “partial mobilization” of Ukraine and vowed to annex the occupied territories. In a televised message, he called the move “an urgent and necessary measure to safeguard Russia’s sovereignty, security and territorial integrity.”
The threat of Russia’s escalating war against Ukraine rattled the market. Oil prices rose, with West Texas Intermediate (WTI) and Brent crude futures rising, but both ended lower. As the euro fell, the dollar also rose towards a record high. In the crypto markets, he ended the day with Bitcoin (BTC-USD) rising slightly after falling below his $19,000 level.
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Alexandra Semenova is a reporter at Yahoo Finance. follow her on her twitter @alexandraandnyc
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