New York Stocks Lower After Fed Announces Rate Steps

The stock exchanges in New York closed trading on Wednesday with negatives. Investors processed, among other things, the Federal Reserve’s interest rate decision, and in particular the statement by the central banks’ umbrella organization that the economy in the United States is gaining momentum and that consideration can be given to a faster phasing out of the corona support measures. It is expected that interest rates will have increased twice by the end of 2023.

The Fed kept interest rates at historically low levels of 0 to 0.25 percent. This was also widely taken into account in the markets, as the banking umbrella previously said it did not expect an interest rate hike until 2023. That is now something different. The number of policymakers that see an earlier rate hike as a possible option also increased.

For investors, phasing out support measures generally means less good news. The Fed is currently still pumping billions into the market through bond purchases, for example. It therefore also wants to decrease in this. The leading Dow-Jones index closed the session with a minus of 0.8 percent at 34,033.67 points. The broad S&P 500 lost 0.5 percent to 4223.70 points. Tech gauge Nasdaq fell 0.2 percent to 14,039.68 points.

Techbedrijven

On Wednesday, attention also went to large tech companies. Facebook announced that it is starting a trial of showing ads in virtual reality games on its Oculus Quest headset. This should ensure that money can also be earned with the hardware. Shares of Facebook also lost 1.7 percent.

Apple (plus 0.4 percent) was also in the spotlight. Apple boss Tim Cook fears for the security and privacy of iPhones if Apple has to comply with stricter European rules. Apple would then be forced, among other things, to allow users to install software outside the Apple App Store, so-called sideloading.

oil price

Furthermore, the oil price briefly rose to its highest level in 2.5 years. That happened after it became known that US oil stocks had continued to decline. In addition, the demand for oil is increasing and is expected to continue for a while. A barrel of American oil was 0.4 percent cheaper at $ 71.85 at the closing bell. Brent oil cost 0.1 percent more at $ 74.05 a barrel.

The euro was worth 1.2101 dollars, compared to 1.2117 dollars at the close of the European stock exchanges.

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