Wall Street tumbled on Wednesday as the Federal Reserve coalesced around a plan to double down on interest rate hikes to fight inflation at 40-year highs, sending Big Tech stocks down more than 2% for a second day in a row.
The three key US stock indexes - the S&P 500, the Dow Jones Industrial Average and the Nasdaq Composite - fell 1.2% on the average, adding to Tuesday's average drop of 1.4%.
Nasdaq, which houses the biggest technology names of the world, including Amazon, Apple, Netflix and Google, led Wednesday's losses, with a drop of 315 points, or 2.2%, to 13,889. It lost 2.3% a day earlier.
"The Fed is worried that elevated inflation had continued to broaden from goods into services. That could keep the Fed aggressive" with rate hikes, Ed Moya, analyst at online trading platform OANDA, said.
Many policy-makers at the central bank think it would be alright to double down on interest rates, increasing them by 50 basis points or half a percentage point in the next round, if US inflation does not back off from 40-year highs, the Federal Reserve's March policy meeting minutes said.
The central bank approved its first pandemic-era rate hike on March 16, raising rates by 25 basis points, or a quarter percentage point.
A majority of Federal Reserve officials have concluded since that the hike was too tame to rein in inflation galloping at 40-year highs and that more aggressive increases of 50 basis points may be needed in the future. The central bank is also considering as many as seven rate adjustments in all this year.
"Many participants noted that one or more 50 basis point increases in the target range could be appropriate at future meetings, particularly if inflation pressures remained elevated or intensified," the Federal Reserve said on Wednesday as it released the minutes of the March 15-16 meeting of its policy-making Federal Open Market Committee.
The meeting minutes, as well as hawkish policy statements throughout Wednesday by Federal Reserve officials, kept stocks down from start to finish.
The S&P 500 - which groups the top 500 US stocks - closed down 44 points, or 1.0%, at 4,481. The S&P 500 lost 1.2% in the previous session.
The Dow Jones Industrial Average, which lists travel, aviation and cross-industry value stocks, settled down 145 points, or 0.4%, at 34,497. The Dow fell 0.8% on Tuesday. (ANI/Sputnik)
( With inputs from ANI )
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