Fed Hike Slams Stocks as Inflation Fears Bite

Global stocks fell sharply on Wednesday after the US Federal Reserve delivered its first interest rate hike since 2023. The Fed raised rates by 25 basis points and signaled further hikes in the months ahead to combat inflation driven partly by higher oil prices.

The Dow Jones Industrial Average dropped 1.3%, while the S&P 500 fell 0.69% and the Nasdaq Composite lost 0.37%. Energy and financials were the main drags on Wall Street, with concerns over rising inflation and higher government bond yields weighing on equities in previous sessions.

MSCI's global equities index fell 0.52%, tracking its third straight session of losses. In contrast, European shares had closed before the Fed's decision, with the pan-European STOXX 600 rising 0.46% and Britain's FTSE 100 adding 0.28%.