Wall Street ended Wednesday’s session in the red. The fact that the US Federal Reserve (Fed) avoided a sharp increase in the federal funds rate by opting for a 50 basis point hike was not enough to keep the three major indexes on the wave of optimism experienced on Tuesday.
The Dow Jones industrial fell 0.42% to 33,965.69 points, while the Standard & Poor’s 500 fell 0.61% to 3,995.26 points. The Nasdaq Composite Technology Index lost 0.76% to 11,170.89.
The US central bank raised its base interest rate by 50 basis points and assured that it will continue to reduce debt on the balance sheet. In addition to this decision, the Fed revised upward its inflation and GDP forecasts.
He also estimated the federal funds rate to peak at 5.1% next year, up from a previously estimated 4.6%. In addition to this so-called “scatter plot”, the end of the talks was marked by a warning from Powell that market expectations for inflation and price slowdown in October and November are still not enough to back away from restrictive monetary policy. .
Powell continues to foresee the need for “further increases” in interest rates and warned that monetary policy has not yet reached “reasonably restrictive” levels.
Among the major market movements, Tesla shares stand out. Shares in electric car makers fell 2.58%, even hitting two-year lows overnight, in response to harsh criticism from Musk’s followers over his focus on managing Twitter at the expense of Tesla.
Even KoGuang Leo, Tesla’s third-largest individual shareholder and a self-described “fan” on social media, posted a tweet saying “Elon has abandoned Tesla, Tesla has no CEO.”
