Wall Street Closed in Red After the Fed’s Decision
Wall Street closed Wednesday in red. The Dow Jones, its main indicator, decreased by 0.77% after the Federal Reserve raised its inflation estimates and advanced the subsequent interest increases to 2023.
The Dow Jones decreased by 94.42 points, or 0.3%, to 34,299.33.
Meanwhile, The S&P 500 lost 0.2% or 8.56 points, to 4,246.59.
The Nasdaq Composite Index, listing the main technology companies, dropped by 0.7%, or 101.29 points, to 14,072.86.
Jerome Powell, the Fed Chairman, stated at a news conference that inflation had exceeded expectations. As a result, the central bank left its benchmark policy rate unchanged between 0% to 0.25%. Powell noted that the Fed would keep buying $120 billion of bonds monthly until tangible progress had been made concerning employment and inflation.
4 of the Fed governors expected interest rate hikes as early as 2022. This time, their number went from four to seven.
Seema Shah, a chief strategist of Principal Global Investors, stated that there still will be worries about tapering. However, it is up to Powell and Fed speakers to reassure the market.
Most of the sectors dropped their value
Public service companies led the losses with a slump of 1.49%. Essential goods followed them by the loss of 1.24%, and the value of basic materials companies dropped by 1.17%.
As for the Dow Jones stocks’ decreases were led by Dow Inc, which yielded 2.42%. At the same time, Walmart lost 2.04%, 3M decreased by 1.84%, and Boeing fell by 1.73%.
So far, the stock market has been trading in greet, believing that higher inflation in the recovery phase would be temporary. However, the investors are worried that the central bank will be forced to reduce its bond-buying program sooner than projected.
The Fed tried to assure markets by mentioning consumer prices and wholesale levels, rising steadily in the country.
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