WASHINGTON (dpa-AFX) - Stocks turned in a strong performance throughout much of the trading day on Wednesday but came under pressure in the latter part of the session. The major averages pulled back well off their highs of the session and into negative territory.
The Dow led the way lower, slumping 631.21 points or 1.2 percent to a three-month closing low of 51,461.90. The S&P 500 fell 33.92 points or 0.5 percent to 7,551.81, its lowest closing level in well over a month, while the tech-heavy Nasdaq posted a more modest loss, edging down 3.15 points or less than a tenth of a percent to 25,978.42.
The late-day weakness that emerged on Wall Street came after the Federal Reserve announced its widely expected decision to raise interest rates for the first time since July 2023.
The Fed said it decided to raise the target range for the federal funds rate by 25 basis points to 3.75 to 4 percent in support of its dual mandate.
In the accompanying statement, the Fed noted that inflation remains elevated and argued today's rate hike will support a timelier return to the central bank's 2 percent goal.
Along with the announcement of the Fed's latest monetary policy decision, officials also provided their latest projections for the economy and interest rates.
The projections show that a majority of Fed officials expect rates to be above 4 percent by the end of 2026, suggesting at least one more rate hike this year.
Selling pressure picked up as Fed Chair Kevin Warsh delivered his post-meeting press conference, with the central bank chief highlighting persistent inflation.
'Our predominant focus is on the price stability side of our mandate. The plain fact is that inflation is too high, and has been for too long,' Warsh said. 'This summer's inflation readings do not tell me that underlying trends have meaningfully improved.'
Earlier in the day, stocks benefitted from bargain hunting following the weakness seen over the two previous sessions.
The early strength also came amid a sharp pullback by crude oil prices, with U.S. crude oil futures tumbling by more than 3 percent after soaring by almost 6 percent over the past two days.
Sector News
Oil service stocks moved sharply lower along with the price of crude oil, with the Philadelphia Oil Service Index plummeting by 3.1 percent to its lowest intraday level in over a month.
Substantial weakness also emerged among banking stocks, as reflected by the 2.9 percent plunge by the KBW Bank Index. The index ended the day at a two-month closing low.
Brokerage, housing and gold stocks also came under pressure late in the session, contributing to the downturn by the broader markets.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. Japan's Nikkei 225 Index and China's Shanghai Composite Index both climbed by 0.7 percent.
The major European markets also moved to the upside on the day. While the U.K.'s FTSE 100 Index rose by 0.3 percent, the German DAX Index and the French CAC 40 Index increased by 0.5 percent and 0.6 percent, respectively.
In the bond market, treasuries gave back ground going into the close after seeing strength for much of the session. The yield on the benchmark ten-year note, which moves opposite of its price, crept up by less than a basis point to 5.010 percent after hitting a low of 4.940 percent.
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