Stocks fall as Fed delivers hawkish rate hike

Global stocks fell on Wednesday, reversing gains from early trade, while U.S. government bond yields rose after the U.S. Federal Reserve delivered a hike in interest rates and suggested more were coming. The Fed raised interest rates by 25 basis points, its first increase since 2023, and signalled further hikes in the months ahead. New Chair Kevin Warsh joined a unanimous vote in favor of the move. The U.S. central bank's decision is aimed at addressing inflation driven partly by higher oil prices. Fed officials expect one more interest rate increase this year and expect to hold steady in 2027. On Wall Street, benchmark S&P 500 and the Nasdaq gave up gains in early trade and finished lower with energy and financials the main drag. The Dow Jones Industrial Average .DJI fell 1.21%, the S&P 500 .SPX fell 0.45% and the Nasdaq Composite .IXIC lost 0.01%. "Our view is that they have done this rate hike and maybe in the future, the market may be overpricing too many hikes going forward, and it may not be as many, and that would be a good relief for risk assets as well as commodities," said Wasif Latif, chief investment officer at Sarmaya Partners. Concerns over rising inflation and higher government bond yields had weighed on equities in the previous two sessions. MSCI's global equities index .MIWD00000PUS fell 0.16%, on track for the third straight session of losses. European shares had closed before the Fed's decision. The pan-European STOXX 600 .STOXX rose 0.46%. Britain's FTSE 100 index .FTSE added 0.28% while benchmarks in Germany .GDAXI, France .FCHI and Spain .IBEX also saw gains. U.S. yields rose, with the 2-year note US2YT=RR yield, which typically moves in step with interest rate expectations for the Fed, rose 7.5 basis points to 4.738%. The yield on benchmark U.S. 10-year notes US10YT=RR rose 2.45 basis points to 5%. ## Oil dips Oil prices fell as reports that Saudi Arabia was offering additional crude cargoes via Oman after drone attacks damaged the kingdom's oil pipeline to the Red Sea. The move appeared to ease concerns about the scale of Middle East supply disruptions. Vessel passage through the Strait of Hormuz remained constrained as attacks in the region intensified. Brent crude futures LCOc1 lost 2.69% to settle at $105.83 a barrel. In currencies, the dollar gained against major peers including the euro and the yen following the Fed's decision. The euro EUR= was down 0.68% at $1.1464. The Japanese yen JPY= weakened 0.77% against the greenback to 156.31 per dollar. The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.63% to 100.31. Spot gold XAU= fell 0.69% to $4,263.19 an ounce.

Stocks fall as Fed delivers hawkish rate hike

Global stocks fall after Fed rate hike

Wall Street and global equities end lower

Yields, oil, currencies and gold move after the decision

Oil dips

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