Market Snapshot: Dow ends 500 points lower, Nasdaq falls 3.4% after Fed raises rates, Powell hints terminal interest rate will be higher than expected

by | Nov 2, 2022 | Stock Market

U.S. stock indexes finished a volatile session with losses on Wednesday after the Federal Reserve announced the fourth straight jumbo increase in its benchmark interest rate and hinted at a potential slowdown in its effort to tighten monetary policy to bring down inflation. However, Powell said in his press conference that it is “very premature” to be thinking about pausing the rise in rates, and the ultimate target for increases in its policy rate may be higher than previously expected.

How are stock indexes trading
The Dow Jones Industrial Average
DJIA,
-1.55%
was down 505.44 points, or 1.6%, to finish at 32,147.76.

The S&P 500
SPX,
-2.50%
 lost 96.41 points, or 2.5%, ending at 3,759.69.

The Nasdaq Composite fell 366.05 points, or 3.4%, to finish at 10,524.80.

On Tuesday, the Dow Jones Industrial Average fell 80 points, or 0.24%, to 32653, the S&P 500 declined 16 points, or 0.41%, to 3856, and the Nasdaq Composite dropped 97 points, or 0.89%, to 10891. The Nasdaq Composite is up 5.5% from its 2022 closing low, but remains down 30.4% for the year to date.What’s driving markets The Federal Reserve on Wednesday approved the fourth straight jumbo increase in its benchmark interest rate, extending a rapid pace of hikes that brings the rate to the highest level in 15 years. By a unanimous vote, the Fed hiked its rate by 0.75 percentage points to a range of 3.75% to 4%.  Also for the first time, the central bank signaled it would watch closely whether this rapid pace might eventually damage the economy with a “lag.” See: Fed approves another jumbo interest-rate hike, adds dovish language on way forward Chairman Jerome Powell acknowledged in a press conference after the announcement that at some point “it will be appropriate to slow the pace of increases,” but he also said it is “very premature to talk about a pause” in raising interest rates. Powell emphasized that the FOMC “has more work to do” and that the ultimate level of the fe …

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