Markets tumbled after Fed Chair Kevin Warsh signaled that current interest rates remain insufficiently restrictive, fueling fears of additional hikes and pushing the dollar to its highest level since July.
S&P 500 dropped 1% heading toward lowest close since July after Fed chair Warsh hinted at more rate hikes.
Dow Jones fell 1.7% or more than 700 points with financial shares leading decline following hawkish Fed press conference.
Nasdaq Composite fell 0.8% as selling began during the Fed press conference signaling potential further tightening.
Dollar index climbed 0.6% to its strongest level since late July as Warsh's hawkish stance boosted the dollar.
U.S. equities retreated Wednesday as Federal Reserve Chair Kevin Warsh adopted a hawkish tone following the central bank's first rate hike in three years. The Dow Jones Industrial Average plummeted over 700 points, while the S&P 500 and Nasdaq Composite also finished lower as investors braced for a potentially prolonged tightening cycle.
While the quarter-point rate hike was expected, markets reacted negatively to Chair Kevin Warsh's hawkish commentary, which suggested that current rates are not yet restrictive enough to curb inflation.