US Stocks Slump as Fed Signals Potential Rate Hikes to Curb Inflation

Major US indices witnessed a sharp sell-off on Wednesday as investors recalibrated their expectations following the Federal Reserve's decision to hold interest rates steady. The shift in sentiment was driven by a hawkish stance from policymakers, signaling that higher interest rates might be necessary to tackle persistent inflation.

Fed Holds Rates Steady but Signals Hawkish Shift

While the Federal Reserve maintained interest rates in the 3.50%-3.75% range as widely expected, the accompanying quarterly projections sent shockwaves through the market. The central bank's policy statement notably removed previous language that had hinted at the possibility of rate cuts this year.

In a departure from tradition, new Fed Chair Kevin Warsh did not submit an interest-rate-path projection as part of the quarterly forecasts. Instead, Warsh emphasized a steadfast commitment to price stability, highlighting the urgent need to tame inflation pressures—exacerbated by oil-price spikes linked to the Iran war. The data revealed that nine central bank officials now expect at least one rate hike by the end of 2026.

Market Reaction: Nasdaq and S&P 500 Retreat

The markets responded swiftly to the Fed's "hawkish tilt." According to CME Group's FedWatch tool, trader bets that rates would remain steady by year-end plummeted from 40% on Tuesday to just 15.7% following the announcement. Currently, expectations for a 25-basis-point hike by December stand at nearly 38%, while a 50-basis-point hike carries a 33% probability.

The impact on major indices was significant:

Economic Data and Geopolitical Volatility

The market turbulence was further complicated by mixed economic indicators and geopolitical uncertainty. US retail sales for May showed an unexpected increase, with households continuing to purchase vehicles despite rising gasoline prices.

علاوه بر این، رالی اخیر در بازار سهام — که ناشی از خوش‌بینی نسبت به توافق صلح مقدماتی میان ایالات متحده و ایران بود — پس از آنکه پرزیدنت دونالد ترامپ اشاره کرد که این توافق نهایی نیست، متوقف شد. تهدید به تجدید درگیری باعث شد قیمت نفت دوباره کمی افزایش یابد و نگرانی‌های تورمی بیشتری را به رادار فدرال رزرو اضافه کند.

در اخبار شرکت‌ها، سهام CME Group پس از اعلام خبر انتقال Terry Duffy، مدیرعامل شرکت، به سمت ریاست اجرایی هیئت مدیره در اول مارس، کاهش یافت. در مقابل، سهام Allbirds پس از تغییر برند شرکت به Smartbird، چرخش به سمت AI و انتصاب Nadia Carlsten، مدیر سابق Amazon، به عنوان مدیرعامل، جهش کرد.

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