US stocks pare gains after Powell's remarks; S&P 500, Dow Jones slump 1.6%
1 min read 23 Mar 2023, 12:51 AM ISTThe S&P 500 falls 1.6% to 3,936.97. The Dow Jones Industrial Average slips 1.6% to 32,030.11. The Nasdaq composite sinks 1.6%, to 11,669.96
PremiumUS stocks pared gains on Wednesday after Federal Reserve chair Jerome Powell reiterated the central bank's commitment to tame inflation.
All three major US stock indices closed 1.6% lower. The S&P 500 fell 1.6% to 3,936.97. The Dow Jones Industrial Average slipped 1.6% to 32,030.11. The Nasdaq composite sank 1.6%, to 11,669.96.
The US Federal Reserve raised its key interest rates by a quarter of a percentage point.
After a two-day meeting, the Federal Open Market Committee (FOMC) voted unanimously to increase its target for the federal funds rate to a range of 4.75% to 5%.
The Fed chief said that the central bank is still focused on getting inflation down to its 2% goal and that it is not envisioning any rate cuts this year.
The Fed could begin raising rates again, even after it takes a pause, if high inflation makes that necessary, Powell added.
Earlier this month, the collapse of Silicon Valley Bank and Signature Bank in the US ignited contagion fears of banking crisis.
“The US banking system is sound and resilient," said the Fed.
US treasury yields fell after the Fed hiked interest rates. The yield on the two-year treasury plunged to 3.96%.
European stocks
European stocks surged on Wednesday for a third day in a row.
The pan-European STOXX 600 index rose 0.2%.
Germany’s DAX up 0.1% at 15,216.19. France’s CAC 40 edged up 0.3% at 7,131.12.
Britain’s FTSE 100 rose 0.4% at 7,566.84.
Bank of England is likely to raise interest rates on Thursday after British inflation climbed to 10.4% in February.
European Central Bank (ECB) chief Christine Lagarde on Wednesday said recent financial turbulence could add to “downside risks" in the eurozone. She also said that policymakers “still have ground to cover to make sure that inflation pressures are stamped out".
Asian shares
Asian shares advanced on Wednesday, mirroring gains in global markets on Tuesday.
Hong Kong’s Hang Seng index rose 1.7% at 19,591.43. Shanghai Composite index up 0.3% at 3,265.75. Japan’s Nikkei 225 jumped 1.9% at 27,466.61.
The S&P/ASX 200 index closed 0.9% higher at 7,018.10.
Crude oil
Oil prices soared about 2% on Wednesday as the US dollar slipped to a 6-week low. Brent crude futures rose $1.37, or 1.8%, to end at $76.69 a barrel. US West Texas Intermediate crude (WTI) closed $1.23, or 1.8%, higher at $70.90.
