Dow Plunges 1,153 Points After Fed Holds Rates Steady

MacroCommodity Impact 5

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Summary · why it matters

US stocks closed sharply lower, with the Dow Jones Industrial Average tumbling 1,153 points, or 2.19%, after the Federal Reserve voted to keep its policy rate at 3.50% to 3.75%. Three of the 12 voting members on the FOMC dissented in favor of a quarter-point rate hike. Fed Chair Kevin Warsh said the committee stands ready to act if necessary. AI-related chip stocks extended their decline, and investors awaited earnings from Microsoft and Meta Platforms. Brent crude oil surged nearly 8%, breaking above 90 dollars a barrel, after President Trump signaled a forceful response to Iran. The yield on the 10-year US Treasury note jumped 7 basis points to above 4.67%, while the 30-year yield surged 10 basis points to above 5.2%, its highest level since 2007. Vertiv shares tumbled 17% after revenue missed estimates, while Ford Motor gained 2.1% after raising its full-year profit forecast for the second time. European markets closed slightly lower, with the STOXX 600 index down 0.29%. Luxury goods stocks fell 2.4%, led by Hermes, which dropped 11% on a lack of recovery signs in the China market, while Kering surged nearly 17% after Gucci sales fell less than expected.