Stocks Drop Amid Chipmaker Sell-Off and Hawkish Fed Statement
U.S. stock indexes fell sharply on Wednesday, with the S&P 500 hitting a one-month low while the Nasdaq 100 reached its lowest level in three months. The decline was driven by a sell-off among chipmakers and AI infrastructure stocks amid rising geopolitical tensions following recent attacks involving Iran and U.S. forces. Additionally, bond yields rose as investors reacted to the Federal Reserve’s hawkish stance during its policy decision. The Fed held interest rates steady at 3.50%–3.75%, but three members dissented in favor of a rate hike. The central bank emphasized price stability and noted that economic activity is expanding despite uncertainty from global conflicts, particularly in the Middle East. Inflation remains elevated due to supply shocks affecting sectors like energy. Meanwhile, oil prices surged over 6% after Iran claimed responsibility for missile attacks on U.S.-linked targets. Tensions remain high as diplomatic efforts to reopen the Strait of Hormuz are stalled.
Topics: chipmakers Fed policy geopolitical risk markets stocks