S&P 500 Plunges 1.9% as Warsh Warns of Rate Hikes

The S&P 500 index fell by approximately 1.9% on August 28, 2026, in response to Federal Reserve Governor Kevin Warsh's speech before the Chicago Council on Global Affairs.

Warsh argued that headline inflation has decelerated but is still structurally durable, and that fiscal policy is running expansionary enough to complicate the Fed's return to a 2% target. He also stated that the Fed's credibility requires it to resist premature easing.

The S&P 500 index settled near 5,580, its weakest close in three weeks. Technology stocks led the decline, falling roughly 2.4%, while financial stocks declined only around 0.8%. The September Federal Open Market Committee meeting will be a significant data point to watch.