Dow falls, Nasdaq rises after mixed Fed rate decision
Wall Street stocks finished mixed on Wednesday, after the Federal Reserve maintained current interest rates but signalled plans for additional rate increases. The Dow Jones dropped 0.7 percent to 33,979. The S&P 500 added 0.1 percent at 4,372, while the Nasdaq climbed 0.4 percent to 13,626. The US central bank, as expected, opted to hold its benchmark lending rate between 5.0 percent and 5.25 percent. But forecasts from policymakers indicated strong support for two more hikes in 2023. Major indices tumbled just after the policy statement was released but recovered somewhat later during Fed Chair Jerome Powell's press conference. Powell described inflation as still too high, but added that the central bank had made no decisions yet about its July meeting or subsequent gatherings. Oanda's Edward Moya characterised the decision as a "very hawkish skip," adding that "the Fed is clearly worried that inflation might not be able to come all the way down to target." But Oxford Economics rated the Fed's posture on additional interest rate hikes as likely a "bluff," according to a note. "If it isn't a bluff, and the Fed continues to hike, that would increase the odds that the central bank pushes the economy into a recession," Oxford Economics added in the note. Analysts noted that the stock market had rallied ahead of Wednesday's announcement in expectation of a Fed pause. That had set the market up for a potential pullback when the news was disclosed. Futures markets currently are betting on a small interest rate increase in July, but not one after that. (AFP)