Stocks in Wall Street closed lower on Wednesday after the U.S. Federal Reserve raised interest rates and signaled that the terminal rates would peak at higher levels than previously expected.
Dow Jones slipped 142.29 points or 0.42% to close at 33,966.35 points. Meanwhile, S&P 500 dropped 0.61% and Nasdaq fell 0.76%.
On the final day of the Fed’s meeting, policymakers agreed to raise interest rates by 50 basis points, bringing it to a targeted range between 4.25% and 4.5%. The raise was in line with the market expectations, but Fed’s lifting its forecast for rates to peak at 5.1% caused concerns to the market.
Fed’s officials noted that they expected policy rates to stay at higher levels next year with no reductions until 2024, which shattered some investors’ hopes for rate cuts in the second half of 2023.