U.S. stocks tank after Fed decision

Alsharq Tribune-Al Otaify 

 U.S. stocks tumbled on Wednesday as bond yields surged following the Federal Reserve's interest rate decision, while a sharp spike in oil prices further stoked inflation fears.

The Dow Jones Industrial Average fell 2.19 percent to 51,594.14. The S&P 500 sank 1.52 percent to 7,316.15. The Nasdaq Composite Index shed 1.74 percent to 24,442.94.

Eight of the 11 primary S&P 500 sectors ended in the red, with industrials and technology leading the laggards by going down 3.24 percent and 2.50 percent, respectively. Meanwhile, energy and consumer staples led the gainers by rising 1.98 percent and 0.26 percent, respectively.

The Federal Reserve's policy statement triggered the sell-off. While nine members of the Federal Open Market Committee voted to keep rates steady, three policymakers dissented, arguing in favor of a 25-basis-point interest rate hike. It marked the first time since 2016 that a Fed policy decision saw three dissents in the same direction.

"I understand the desire for rolling forecasts and commentary from this committee, but for our part, we need to observe market reaction to developments direct and unfiltered," Fed Chair Kevin Warsh said. "I want to stress, of course, that decisions by this committee matter a great deal, and where necessary and appropriate, we will not hesitate to act."

Adding to broad cost concerns, global oil prices surged after U.S. President Donald Trump told media outlets that military responses targeting Iranian infrastructure would intensify following surprise attacks on U.S. troops in the Middle East. West Texas Intermediate for September delivery went up 5.20 U.S. dollars, or 6.56 percent, to settle at 84.46 dollars a barrel on the New York Mercantile Exchange. Concurrently, Brent crude for September delivery gained 6.65 dollars, or 7.91 percent, to settle at 90.74 dollars a barrel on the London ICE Futures Exchange.

"Markets ahead of today had been fully pricing a September rate hike, but again, there is a significant divergence between the market's view and economists, who in aggregate expect stable policy to continue," wrote ING bank. "We are in the camp that think the Fed will hold, but it is going to be close."

On the corporate front, semiconductor equities extended their recent downward trend. Micron Technology plummeted nearly 10 percent, and Advanced Micro Devices and KLA Corporation went down 5.51 percent and 10.8 percent, respectively.

Among other earnings-driven stock movements, GE HealthCare Technologies surged 12.15 percent. Conversely, Vertiv Holdings tumbled 17.26 percent and Procter & Gamble declined 1.87 percent. Market attention shifted toward after-hours trading as investors awaited high-stakes earnings disclosures from tech heavyweights Microsoft and Meta Platforms.