New York Stock Market: "Fed's Hawkish Stance Stronger Than Expected"… Downward Pressure

New York stock market report.

All three major U.S. stock indices closed lower.

The Nasdaq and S&P 500 indices both fell by over 1%, while the Dow Jones Industrial Average also slid by nearly 1% to close the session.

With all sectors in the red, interest-rate-sensitive sectors—including communication services, consumer discretionary, and real estate—each dropped more than 2%, leading the market decline.

The New York stock market faced downward pressure today due to the Federal Reserve's unexpectedly hawkish stance.

Although the benchmark interest rate was held steady, the median projection in the "dot plot," which reflects the outlook for interest rates within the year, was raised to 3.8%, significantly dampening the market's long-held expectations for rate cuts this year.

Investor sentiment soured rapidly as nine out of 18 committee members signaled the possibility of at least one additional rate hike before the end of the year.

In particular, new Chair Kevin Warsh stated during a press conference that the Fed would adhere to its 2% inflation target and discussed only limited rate cuts. This completely overturned the market's optimism that, as a Trump administration appointee, he would implement early interest rate cuts.

Consequently, short-term Treasury yields and the dollar surged, placing immediate pressure on the stock market. Furthermore, the Fed left the door open for potential additional rate hikes due to inflation risks stemming from the war in Iran, further fueling the sell-off.

Among individual stocks, big tech companies saw weakness, with Meta falling 5%, while SpaceX plunged nearly 5%, marking its first decline since going public.

With the risk of additional interest rate hikes within the year now at the forefront, the stock market is expected to face inevitable volatility due to uncertainty for the time being.
※ Please note: This article was translated by AI and may contain errors.