The Dow Jones Industrial Average fell for a second day as investors digested the Federal Reserve’s latest policy update, in which it moved up its timeline for interest rate hikes and forecast higher inflation.
Materials-related stocks led the losses as the Fed’s move to eventually raise rates, along with a current campaign by China to tamp down the price of metals, took the air out of a surge in commodity prices this year.
Losses in the overall market were tame, however, and the S&P 500 was less than 0.9% below an all-time high. The central bank maintained its asset-buying program, which some investors argued would support equities some more in the short term.
The Dow Jones Industrial Average dropped 210 points, or 0.62%, to 33,823.45, weighed down by losses of more than 3% in Dow Inc. and Caterpillar each as most commodity prices took a hit. The S&P 500 fell 0.04% to 4,221.86. The Nasdaq Composite gained 0.87% to 14,161.35 as investors huddled in some Big Tech stocks with Tesla up 1.9%, Amazon up nearly 2.2% and Facebook up 1.6%. Shopify and Twilio gained close to 6.1% and 8%, respectively.
The closely-watched Federal Reserve meeting Wednesday spurred a sell-off in equities after the central bank moved up its timeline for rate hikes, seeing two increases in 2023. The central bank also hiked its inflation forecast to 3.4% for the year, a percentage point higher than the Federal Open Market Committee’s forecast in March.
Reference: CNBC
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