Stock Market Today: Dow in Wild Ride to End Lower After Fed Hikes Rates

By Yasin Ebrahim — The Dow closed lower Wednesday, though swung wildly between gains and losses as the Federal Reserve raised interest rates and lifted its outlook on further rates hikes pointing to a period of higher for longer rates.

The slipped 1.7%, or 522 points, the was down 1.8%, and the fell 1.7%,

The Fed rates by 0.75% and signaled that there was more room to frontload rate hikes after forecasting rates to reach about 4.4% by year end, that is well above the 3.8% projected previously.  

“We’ve just moved into the very, very lowest level of what might be restrictive [territory],” Powell said Wednesday following the rate hike. “In my view, there’s a ways to go.” 

The Fed also projected that a recession may possibly be avoided despite its need to speed up rate hikes to bring inflation under control. But economists at Jefferies suggested that it was “hard to believe that the Fed is capable of pulling off such a delicate landing of the economy onto a gradual glidepath towards somewhat lower growth, only mildly higher unemployment, and on-target inflation.”

Bond markets were quick to price in the growing risk of a recession as the Treasury further inverted. The over inverted to beyond 50-basis points. 

The prospect of higher for longer interest rates weighed on growth sectors of the economy as tech and consumer discretionary fell more than 1%, with the latter dragged down by travel and leisure stocks. 

Caesars Entertainment Corporation (NASDAQ:) fell by 8%, Las Vegas Sands Corp (NYSE:) was down by more than 6% and Carnival Corporation (NYSE:) slipped by nire than 6%.

Big tech, meanwhile, also faltered as Apple (NASDAQ:) pared gains from a day earlier, while Meta Platforms (NASDAQ:) fell more than 2%.

Stitch Fix (NASDAQ:) closed almost 3% higher, though was up more than 15% intraday despite reporting a wider-than-expected loss in the as slowing global growth blunted consumer demand.

Wedbush cuts its price target on Stitch Fix to $5 from $7, warning that “visibility into a turnaround is extremely low right now,” though said that the cheap valuation of the company was the “only reason” it wasn’t more negative on the stock.

General Mills Inc (NYSE:) shrugged off the broader market malaise, rising more than 5% after raising its outlook on performance following better-than-expected . 

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