U.S. Stocks Fall After Fed Sets Expectations for Rate Path
Investing.com | Author Liz Moyer
Published Sep 22, 2022 09:50AM ET
Updated Sep 22, 2022 10:55AM ET
By Liz Moyer
Investing.com -- U.S. stocks fell a day after the Federal Reserve delivered its predictions for the path of interest rates.
At 10:53 ET (14:53 GMT), the Dow Jones Industrial Average was down 85 points, or 0.3%, while the S&P 500 was down 0.8% and the NASDAQ Composite was down 1.3%.
As expected, the Fed raised its benchmark rate by a 0.75 percentage point. It also offered forecasts for rates, saying they would rise above 4.5% next year, which is higher than expected and a period that was longer than expected.
Investors have worried that an aggressive Fed could tip the economy into a recession. The Fed is determined to tame inflation, and acknowledged that it would mean unemployment will rise in the process.
The labor market remains tight, with 213,000 new jobless claims filed last week, which was below expectations and only slightly above the revised figure for the week before.
The Fed predicted yesterday that unemployment would rise to 4.4% next year from 3.7% now, though Chair Jerome Powell pointed out during a press conference yesterday that there are still a high number of job openings versus job seekers.
Robinhood Markets Inc (NASDAQ:HOOD) shares rose 1.5% on a report the Securities and Exchange Commission will allow brokers to keep their payment for order flow business model, after criticism of the practice. The report by Bloomberg said there could be rule changes ahead.
Shares of Salesforce Inc (NYSE:CRM) rose 2.5% after the software maker said fiscal year revenue was targeted to be $50 billion.
Oil jumped. Crude Oil WTI Futures was up 0.7%, to $83.47 a barrel, while Brent Oil Futures crude rose 0.7%, to $90.47 a barrel. Gold Futures rose 0.2% to $1679 an ounce.
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