Wall Street slumps into negative side after Fed rate news

Wall Streets main indexes plunged on the negative side immediately after the Federal Reserve announced an expected large hike in interest rates on Wednesday, the latest move by the USA central bank to tame decades-high inflation.

Wall Street slumps into negative side after Fed rate news
A trader works on the trading floor at the New York Stock Exchange (NYSE) in Manhattan, New York City, U.S., September 13, 2022. REUTERS/Andrew Kelly

Sept 21 (Reuters) - Wall Street's main indexes plunged to the negative side immediately after the Federal Reserve announced an expected large hike in interest rates on Wednesday, the latest move by the U.S. central bank to tame decades-high inflation.

At the end of its two-day meeting, the Fed lifted its policy rate by 75 basis points for the third time to a 3.00-3.25% range. Most market participants had expected such an increase, with only a 21% chance of a 100 bps rate hike seen prior to the announcement.

Policymakers also signaled more large increases to come in new projections showing its policy rate rising to 4.40% by the end of this year before topping out at 4.60% in 2023. Read more

By 2:05 p.m. ET (1805 GMT), the Dow Jones Industrial Average fell 296.82 points, or 0.97%, to 30,409.41, the S&P 500 lost 36.59 points, or 0.95%, to 3,819.34 and the Nasdaq Composite dropped 131.77 points, or 1.15%, to 11,293.28.

Reporting by Medha Singh, Devik Jain and Ankika Biswas in Bengaluru and David French in New York; Editing by Marguerita Choy