US stocks end lower as Fed lifts interest rates again

US stocks end lower as Fed lifts interest rates again

NYSE Sep26
Traders work on the floor of the New York Stock Exchange. (AP Photo/Richard Drew)

NEW YORK: Wall Street stocks finished lower on Wednesday (Sep 26) after the Federal Reserve lifted interest rates again and signalled it expects to continue raising rates gradually amid solid US growth.

The Dow Jones Industrial Average ended down 106.93 points (0.40 per cent) at 26,385.28.

The broad-based S&P 500 shed 9.59 points (0.33 per cent) to 2,905.97, while the tech-rich Nasdaq Composite Index lost 17.10 points (0.21 per cent) to 7,990.37.

The Fed, as expected, boosted the lending rate to 2.0 per cent to 2.25 per cent. It once again said "further gradual increases" would allow continued expansion of the economy while keeping inflation around the Fed's two per cent target.

READ: US Fed raises benchmark interest rate amid strong economy

But Fed Chairman Jerome Powell said the central bank was hearing a "rising chorus" of concerns from businesses around the country about uncertainty and rising costs, but that the myriad trade conflicts had yet to significantly weigh on US economic data.

Jerome Powell
Federal Reserve Chairman Jerome Powell speaks during a news conference in Washington, DC. (AP Photo/Susan Walsh)

The announcement "was pretty well telegraphed," said JJ Kinahan, chief market strategist at TD Ameritrade, told AFP.

On Twitter, Kinahan said the Fed's shift in policy direction from one of loose money made sense in that "the market just doesn't seem to need so much support now."

Stocks stayed in positive territory most of the day, but tumbled into the red in the final minutes following Powell's news conference, a sudden change in direction that is not unusual on the day of Fed decisions.

Large banks retreated as 10-year bond yields fell, with JPMorgan Chase, Citigroup and Bank of America all shedding more than one per cent.

Dow member Nike fell 1.3 per cent after reporting a 15 per cent jump in earnings for the first quarter of the 2019 fiscal year to US$1.1 billion, with the company's profit margin lagging some analysts' expectations.

Source: AFP/de

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