The Federal Reserve delivered a unanimous 25-basis-point rate hike and signaled further tightening, prompting a sell-off in US equities and a rise in Treasury yields as investors adjust to a hawkish policy outlook.
The S&P 500 fell 1% after the Federal Reserve raised rates and signaled another hike, reflecting expectations of tighter policy.
The Nasdaq declined 0.7% as technology stocks sold off following the Fed's hawkish rate hike and press conference.
The US dollar index rose 0.6% to 100.30 as the Fed's rate hike boosted demand for the currency.
The 2-year Treasury yield jumped 7 bps to 4.732%, reflecting increased market expectations for further rate hikes.
The 10-year Treasury yield rose 2 bps to 5.012%, indicating bond prices declined on the Fed's hawkish stance.
The 30-year Treasury yield edged down 0.5 bps, showing a mixed performance in long-dated bonds.
The Federal Reserve unanimously raised interest rates by 25 basis points to a 3.75%-4.00% range, signaling a hawkish stance to combat persistent inflation. Under new Chair Kevin Warsh, the committee projected at least one additional rate hike before year-end, causing US stocks to retreat and Treasury yields to climb as markets recalibrate for a higher-for-longer interest rate environment.
The Fed raised rates to address persistent inflation, with the committee emphasizing a commitment to price stability and noting that current economic conditions, including resilient spending and robust capital investment, support further tightening.