2023-09-20 20:40:48

The New York Stock Exchange (NYSE) in New York City, United States

par Stephen Culp

NEW YORK (Archyde.com) – The New York Stock Exchange ended lower following the US Federal Reserve (Fed) announced, as expected, that it was maintaining interest rates at their current level but warned that its strict monetary policy might remain in place for much of next year.

The Dow Jones index fell 0.22%, or 76.85 points, to 34,440.88 points.

The broader S&P-500 lost 41.75 points, or 0.94%, to 4,402.20 points.

The Nasdaq Composite fell 209.06 points (1.53%) to 13,469.13 points.

The main Wall Street indices plunged into negative territory following the publication of the Fed’s press release which also revealed, at the end of a two-day monetary policy meeting, its quarterly economic forecasts.

The US central bank has paved the way for another 25 basis point rate hike by the end of the year, while calling in its document for a 50 basis point rate cut next year.

“There were no surprises,” said Peter Cardillo, chief economist at Spartan Capital Securities in New York. The Fed “sees further rate hikes, its inflation target is still 2% and the labor market is still tight,” he continued.

“The Fed now sees interest rates staying high a little longer than previously announced, and that’s working its way into the market,” he said.

Since launching a cycle of monetary tightening in March 2022 with the aim of stemming galloping inflation, the Fed has seen underlying inflation ease but is struggling to get firmly closer to its target of 2 %, while the American economy appears resilient, fueling fears of high interest rates in the long term.

Speaking following the release of the US central bank’s statement, its president, Jerome Powell, tempered the optimistic economic forecasts by warning that there was still a way to go to bring inflation back to 2%.

Among the major S&P-500 sectors, interest-rate-sensitive communications services and technology saw the largest declines.

On the value side, Klaviyo rose 9.2% for its IPO, the third IPO in New York in recent days following Arm and Maplebear – which both ended down.

Pinterest gained 3.1% following announcing a billion-dollar share buyback program.

(French version Jean Terzian)

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