Global markets update: US stocks decline as Fed hints it may hike rates again
US stocks declined on Wednesday after the Federal Reserve left key interest rates unchanged, but said it could hike rates again this year.
The US central bank also revised economic projections higher with a warning that battle against inflation was far from over.
The S&P 500 lost 42.02 points, or 0.95%, at 4,401.93 points. The Nasdaq Composite fell 209.62 points, or 1.53%, at 13,468.57. The Dow Jones Industrial Average shed 78.13 points, or 0.23%, at 34,439.60.
In a statement, the Federal Open Market Committee(FOMC) said that officials will determine the “extent of additional policy firming that may be appropriate.”
Chair Jerome Powell said the Fed is “prepared to raise rates further if appropriate, and we intend to hold policy at a restrictive level until we’re confident that inflation is moving down sustainably toward our objective.”
The yield on the 10-year treasury rose at 4.39% from 4.37% late Tuesday. The 2-year treasury yield jumped at 5.18%.
Shares of Microsoft, Apple and Nvidia all fell at least 2%.
Instacart plunged 10.7% and Arm Holdings fell 4.1%.
Currencies
The US dollar rose at 148.03 Japanese yen from 147.86. It rose at $1.0686 from $1.0677 against the euro.
Europe
European shares rose on Wednesday as government bond yields across the continent fell.
The pan-European STOXX 600 index added 0.9%.
Britain’s FTSE 100 edged up 0.9% at 7,731.65. Germany’s DAX rose 0.8% at 15,781.59.
France’s CAC 40 added 0.7% at 7,330.79.
Real estate stocks gained 2.2%.
Euro zone banks surged 2%, on UniCredit’s 4.7% rally.
Canada
Canada stocks pared its earlier gains to end down on Wednesday. The Toronto Stock Exchange’s S&P/TSX composite index closed down 4.2 points, at 20,214.69.
The energy sector on TSX fell 1.4% as oil prices lost 1%.
Asia
Asian share markets dropped on Wednesday.
Hong Kong’s Hang Seng Index fell 0.6% at 17,885.60. China’s Shanghai Composite lost 0.5% at 3,108.57. South Korean shares ended flat.
Japan’s Nikkei 225 edged down 0.7% at 33,023.78. Australia’s S&P/ASX 200 index closed 0.5% lower at 7,163.30. New Zealand’s benchmark S&P/NZX 50 index fell 0.2% at 11,324.82.
Energy prices
The US crude oil benchmark for October delivery fell 92 cents at $90.28 a barrel on Wednesday. Brent crude for November delivery lost 81 cents at $93.53 a barrel.
Natural gas for October delivery fell 12 cents at $2.73 per 1,000 cubic feet.
Bullion
Gold for December delivery gained $13.40 at $1,967.10 an ounce. Silver for December delivery added 38 cents at $23.84 an ounce.
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Updated: 21 Sep 2023, 02:14 AM IST
