Wall Street falls after Fed rate hike as European markets rise, oil drops
US stocks fell Wednesday after the Federal Reserve's interest rate hike was seen as more hawkish than expected, while European markets gained as oil prices dropped and the dollar strengthened.
The US Federal Reserve raised interest rates on Wednesday, and while the move itself was anticipated, markets judged the central bank's tone tougher than expected — policymakers signaled at least one more rate hike is likely this year. According to Fed Chair Kevin Warsh, the fight against inflation will not be resolved by a single rate increase, a message the bond market appeared to trust as US Treasury yields rose. The decision drew sharp criticism from President Donald Trump, who has pushed for lower rates.
Stock markets
Wall Street indexes closed lower Wednesday. The Dow Jones Industrial Average dropped 1.2% to 51,461.90 points, the S&P 500 slipped 0.5% to 7,551.81, and the Nasdaq Composite edged down less than 0.1% to 25,978.42.
European exchanges moved in the opposite direction, lifted by falling oil prices. London's FTSE 100 gained 0.3% to 10,688.47 points, Paris's CAC 40 rose 0.6% to 8,140.59, and Frankfurt's DAX 30 added 0.5% to reach 25,537.75.
Oil and currencies
Oil prices fell after reports of rising US crude reserves and analyst expectations that Saudi Arabia's oil pipeline could resume operations within days. WTI crude dropped 3.2% to $102.43 a barrel, while Brent crude fell 2.7% to $105.83 a barrel. Dutch TTF natural gas prices edged down 0.4% to €77.75 per megawatt-hour.
The dollar strengthened against major currencies: the euro fell from $1.1544 to $1.1464, the British pound dropped from $1.3478 to $1.3377, and the dollar rose against the Japanese yen from 155.10 to 156.37. The euro gained slightly against the pound, rising from 85.64 to 85.69 pence.
