U.S. stocks fell in choppy trading on Wednesday after the Federal Reserve raised interest rates by 75 basis points and forecast an even bigger hike in interest rates in its battle to tame rising inflation.
The Dow Jones Industrial Average fell 522.45 points, or 1.7%, to close at 30,183.78. The S&P 500 fell 1.71% to 3789.93, and the Nasdaq Composite fell 1.79% to 11220.19.
Standard & Poor’s ended Wednesday’s session down more than 10% since the start of the month and 21% off its 52-week high. Even before the interest rate decision, stocks were pricing in an aggressive tightening campaign by the Federal Reserve that could tip the economy into recession.
Stocks were volatile as traders were analyzed by the interest rate decision and the latest comments from Federal Reserve Chairman Jerome Powell’s press conference. At its highest, the Dow Jones rose more than 314 points.
The Fed raised interest rates by a widely expected 75 basis points and said it expected the so-called final interest rate to reach 4.6% to combat persistently high US inflation. This is the rate at which the central bank will end its tightening regime. The central bank has also indicated that it plans to stay aggressive, raising interest rates to 4.4% by next year.