Stocks fell lower Wednesday after the Federal Reserve signaled one more interest rate hike was coming before the year's end. The Dow Jones Industrial Average lost over 75 points, while the S&P 500 Index and Nasdaq Composite declined roughly 1% and 1.5%, respectively.
Here's how the market settled on Wednesday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
Driving market moves throughout the session, the Fed held interest rates at their current range of 5.25% to 5.50%, a decision that was widely anticipated by Wall Street. However, the Federal Open Market Committee (FOMC) signaled it expects to issue one more rate hike before the end of the year and could hold rates at a higher level for longer than previously forecasted.
Projections released on the central bank's dot plot showed the high probability of one more rate hike in 2023, than two cuts in 2024 -- two fewer than were forecasted by the Fed in June -- which would bring the Fed's funds rate to a median of 5.6% by the end of the year and keep it around 5.1% in 2024.
Fed Chair Jerome Powell said during a news conference following the FOMC decision that while price increases have shown some signs of easing, getting inflation back down to the Fed's target rate of 2% is an ongoing battle.
"Inflation has moderated somewhat since the middle of last year, and longer-term inflation expectations appear to remain well anchored as reflected in a broad range of surveys of households, businesses and forecasters as well as measures from financial markets," Powell said. "Nevertheless, the process of getting inflation sustainably down to 2% has a long way to go."
Powell added that policymakers are not fully convinced that inflation's impact is lessening.
"We want to see convincing evidence really that we have reached the appropriate level, and we're seeing progress and we welcome that," Powell said. But, you know, we need to see more progress before we'll be willing to reach that conclusion."
In another major initial public offering debut for the week, Klaviyo
Shares of Stellantis
On the earnings front, foods products company General Mills
For Thursday, market participants will continue to digest the central bank's policy decision as Wall Street heads towards a potential week of losses.