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Wall St. turns negative after Fed press conference

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A screen displays the headlines that the U.S. Federal Reserve raised interest rates as a trader works at a post on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 19, 2018. REUTERS/Brendan McDermid

NEW YORK (Reuters) – U.S. stocks fell on Wednesday after the Federal Reserve’s forecast of fewer interest-rate increases in 2019 fell short of investors’ hopes of a more dovish monetary policy.

The Fed’s Federal Open Market Committee said in a statement following a two-day policy meeting that risks to the economy were “roughly balanced,” but it would “continue to monitor global economic and financial developments and assess their implications for the economic outlook.”

Investors said Fed Chairman Jerome Powell’s remarks in a news conference following the committee’s statement that he did not see the central bank changing its policy of keeping its balance sheet run-off on “autopilot” raised concerns of tightening financial conditions placing further strain on financial markets.

“Powell is steadfast in his commentary today that he doesn’t see any tightening that stems from the unwinding of the balance sheet,” said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey. “The market message is we are seeing tighter financial conditions and a weaker path for growth.”

The Dow Jones Industrial Average .DJI fell 439.99 points, or 1.86 percent, to 23,235.65, the S&P 500 .SPX lost 30.67 points, or 1.20 percent, to 2,515.49 and the Nasdaq Composite .IXIC dropped 128.48 points, or 1.89 percent, to 6,655.43.

Reporting by April Joyner; Additional reporting by Chuck Mikolajczak in New York and Amy Caren Daniel in Bengaluru; Editing by Bernadette Baum and Leslie Adler

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