Fed's No-Rate-Hike Decision Triggers US Stock Market Rout

US stocks plummeted on Wednesday in response to the Federal Reserve's decision not to raise interest rates, despite expectations of a hike. The Dow Jones Industrial Average fell by 1,152 points, or 2.2%, its biggest one-day drop since April 2025.

The S&P 500 lost 1.5% and the Nasdaq Composite dropped 1.7%. Treasury yields rose sharply as investors reassessed inflation and monetary policy prospects. The benchmark 10-year Treasury yield climbed above 4.66%, while the 30-year Treasury yield reached its highest level since 2007 at over 5.2%.

Rising oil prices, driven by geopolitical tensions in the Middle East, added to inflation concerns. West Texas Intermediate crude settled at $84.46 per barrel, a 6% increase from previous levels.

Semiconductor stocks continued their decline, with the iShares Semiconductor ETF (SOXX) falling 5.5%. Micron Technology and KLA each dropped around 10%, while AMD lost 5.5%.