Wall Street Drops as Fed Chair Kevin Warsh Delivers Hawkish Remarks

All three major U.S. stock indexes closed lower for the third consecutive session.

The Dow Jones Industrial Average suffered the sharpest decline, falling more than 1%, while the S&P 500 dropped by about 0.45%.

By sector, energy and financial stocks stood out with drops of 2% and 1%, respectively.

The main driver pulling down Wall Street today was the Federal Reserve raising its benchmark interest rate for the first time in 3 years and 2 months, along with hawkish remarks from Fed Chair Kevin Warsh.

While the 0.25 percentage point hike itself was in line with market expectations, market sentiment froze rapidly following Chair Kevin Warsh's press conference.

Chair Kevin Warsh emphasized that inflation is too high and has persisted for too long, noting that it is difficult to define the current interest rate level as sufficiently restrictive.

In the dot plot released alongside the decision, the majority of FOMC members signaled the possibility of additional rate hikes within the year, quickly shifting market focus from whether there will be another hike to how many more times rates will be raised.

As concerns over further tightening grew, the yield on the 10-year U.S. Treasury note surpassed the 5% mark once again.

In the wake of this, banking stocks slid sharply amid growing concerns over troubled loans.

However, Intel rose more than 4% on news that it is discussing cooperation with SK hynix for memory semiconductor production in the United States, helping to cushion the decline in tech stocks.

Attention is now focused on how concerns over prolonged high interest rates, following the rate hike delivered after 3 years, will act as a lasting burden on Wall Street.
※ Please note: This article was translated by AI and may contain errors.