Hawkish Warsh; Wall Street Closes in the Red

US stock markets closed lower in Wednesday's trading (Sept. 16) after the Federal Reserve raised interest rates by 25 basis points, in line with market expectations. The S&P 500 fell approximately 0.4%, the Dow Jones lost 631 points, while the Nasdaq 100 ended virtually unchanged.

Market pressure mounted after FOMC members' median projections indicated the possibility of one to two additional rate hikes this year. Projections for inflation and economic growth were also revised upward, while the unemployment rate is expected to be lower in the coming years.

Fed Chair Kevin Warsh reinforced the hawkish sentiment by asserting that the fight against inflation remains a top priority. The market interpreted these comments as signaling that the tightening cycle may not be over, despite the recent rate hike.

The banking sector was among the hardest hit. Bank of America fell 2.7%, Wells Fargo declined 3%, and Citigroup lost 2.4%. Technology stocks also faced pressure, with Microsoft dropping 1.4% and Alphabet falling 0.6%.

Newsmaker Analysis: Wall Street's negative reaction indicates that investors are more focused on the prospect of further rate hikes than on the 25-basis-point decision itself. If the Fed maintains a hawkish tone and Treasury yields remain high, pressure on interest-rate-sensitive sectors could persist.

Source: Newsmaker.id