NEW YORK () – U.S. stocks fell sharply on Wednesday after U.S. Federal Reserve meeting minutes showed the central bank may have to raise interest rates faster than expected.
The S&P 500 and Nasdaq extended their rapid decline after minutes that investors thought were more brutal than they feared. The Dow, which hit a record high earlier in the day, changed course and closed lower.
Minutes of the Fed’s December 14-15 policy meeting detailed last month’s central bank’s move to tighter monetary policy to curb inflation. Politicians said last month that the U.S. labor market was “too tight”.
“It’s worse than expected,” he said. That shift in value could be problematic for both the stock market and bond markets, ”said David Carter, chief investment officer at Lenox Wealth Advisors in New York.
The S&P 500 technology sector was the biggest hurdle in the S&P 500 rankings, while the rate-sensitive real estate sector led to declines across industries.
According to preliminary data, the S&P 500 index lost 92.86 points or 1.94% to 4700.49 points, while the Nasdaq Composite lost 524.89 points or 3.36% to 15,097.83. reached the point. The Dow Jones Industrial Average fell 387.47 points, or 1.05 percent, to 36,412.18 points.
An increase in interest rates increases borrowing costs for businesses and consumers. Higher rates, especially for technology and other growth stocks, could reduce stock market increases.
The S&P 500 financial index also fell a day after hitting an all-time high.
Politicians have agreed to speed up the end of the pandemic bond-buying program and have announced forecasts that they expect the rate to triple by a quarter of a percent by 2022.
Additional reports by Stephen Kulp of New York and Devik Jain and Shreyashi Sanial of Bengaluru; Edited by Maju Samuel