Wall Street drops as Fed holds rates, signals 2026 hike risk
What's new: Fed projections showed nine officials expect at least one rate increase by the end of 2026.
US stocks fell sharply Wednesday after the Federal Reserve left interest rates unchanged but shifted its outlook toward possible increases later in 2026. The Dow Jones Industrial Average lost 507.12 points, or 0.98%, while the S&P 500 fell 1.21% and the Nasdaq Composite dropped 1.34%. New quarterly projections showed nine Fed officials expect at least one rate hike by year-end 2026, and the policy statement removed language that had pointed to likely rate cuts next year. In his first meeting as Fed chair, Kevin Warsh stressed price stability as inflation pressure persists after an oil-price spike during the Iran war. Rate futures later showed growing odds of a hike as soon as September.