Stocks Slip as Fed Raises Rates for First Time in Three Years
On September 16, the U.S. stock market declined following a Federal Reserve interest rate hike of 25 basis points to a target range of 3.50%-3.75%. This marked the first increase since July 2023 and was accompanied by a hawkish tone from Fed Chairman Kevin Warsh regarding inflation control. The S&P 500 fell 0.45%, the Dow Jones Industrial Average dropped 1.21%, while the Nasdaq Composite dipped slightly at -0.01%. Higher interest rates typically increase borrowing costs, which can slow economic growth and pressure equities in the short term. However, historical data from Goldman Sachs suggests that long-term gains often follow initial declines after rate hikes. Artificial intelligence stocks saw some recovery due to value buying activity. Notable performers included Dell Technologies (up 3.64%), Intel, and Nvidia. Meanwhile, gold prices fell by 0.67%, and the yield on the 10-year Treasury rose slightly.
Tickers: $DELL $GS $INTC $NVDA $SKHYV
Topics: Dow Jones Industrial Average Federal Reserve Nasdaq Composite S&P 500 stock market reaction