New York: Wall Street stocks finished lower on Wednesday after the Federal Reserve lifted interest r
New York: Wall Street stocks finished lower on Wednesday after the Federal Reserve lifted interest rates and signaled a more aggressive pace of additional hikes amid a strengthening economy.
Stocks were also pressured by revived trade war fears on a report that President Donald Trump’s administration would proceed with tariffs on Chinese goods.
The Dow Jones Industrial Average dropped 0.5 percent to 25,201.20.
The broad-based S&P 500 shed 0.4 percent to 2,775.63, while the tech-rich Nasdaq Composite Index dipped 0.1 percent to 7,695.70, retreating from Tuesday’s record.
In addition to lifting benchmark interest rates to a range of 1.75-2.0 percent, which was expected, the Fed released interest rate projections that implied two more rate hikes instead of one in 2018 and four rate hikes in 2019 instead of three.
The FOMC statement stressed that rising interest rates were unlikely to derail economic growth — which the committee now characterized as “strong” rather than “moderate,” an upbeat appraisal maintained by Fed Chair Jerome Powell during a news conference.
At roughly the same time as the Fed announcement, the Wall Street Journal reported that the Trump administration intends to proceed with a plan to impose tariffs on tens of billions of dollars of Chinese goods, a move expected to prompt retaliatory measures from China.
Boeing and Caterpillar, two blue-chip companies with significant operations in China, both lost around two percent.
Art Hogan, chief market strategist at Wunderlich Securities, described the Fed’s decision as “moderately hawkish,” but said it was not much different than expected. He said Boeing’s drop reflected trade-war fears.
“Right now, the stock market is as much about trade policy as it is about monetary policy,” Hogan said.
Media stocks were among the biggest movers following a US judicial decision that cleared the way for the $85 billion merger of wireless and broadband giant AT&T with media-entertainment conglomerate Time Warner.
Time Warner rose 1.8 percent, while AT&T dropped 6.2 percent.
The court’s rejection of the Justice Department’s antitrust challenge to the AT&T deal was seen as easing the pathway for additional media consolidation.
Twenty-First Century Fox, which has a deal to sell key assets to Disney, surged 7.7 percent, suggesting the market anticipates a bidding war over the assets. Disney gained 1.9 percent.
Comcast, which shed 0.2 percent during the session, announced after the closing bell that it was offering $65 billion for the Fox assets, topping Disney’s bid.
AFP
