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The
three main indexes finished more than 1.7% down on Wednesday,
with the Dow posting its lowest close since June 17. The Nasdaq
and S&P 500, respectively, ended at their lowest point since
July 1 and June 30.
The U.S. central bank hiked interest rates by 75 basis points
for a third straight time as largely anticipated, but forecast
its policy rate rising at a faster pace and to a higher level
than expected and the economy slowing to a crawl.
The Fed's target policy rate is now at its highest level since
2008, and the new projections show it rising to the 4.25%-4.50%
range by the end of this year.
Worries about the impact of aggressive interest rate hikes on
the economy and corporate profits have left the benchmark S&P
500 less that 4% away from its mid-June low, its weakest point
of the year.
"There's capacity for equity markets to retest new lows," said
Laura Cooper, a senior investment strategist at BlackRock.
"We've seen it already in terms of repricing of valuation but
I'd expect the next leg could come from earnings revisions,
notably as the growth risks come through in terms of more
downgrades ahead."
The U.S. bond yield curve inverted further, amplifying concerns
about a recession in the next one-to-two years. [US/]
Rate-sensitive bank stocks were mixed in premarket trading, but
heavyweights such as Apple Inc, Tesla Inc and Microsoft Corp
rose between 0.4% and 0.9% after tumbling in the previous
session.
At 4:36 a.m. ET, Dow e-minis were up 147 points, or 0.49%, S&P
500 e-minis were up 17.25 points, or 0.45%, and Nasdaq 100
e-minis were up 48.75 points, or 0.42%.
Elsewhere, the yen rose sharply against the dollar after Japan
intervened in the forex market for the first time since 1998 to
shore up the battered currency.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj
Kalluvila)
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