US Stock Market Plunges Amid Surprise Fed Decision

The US stock market experienced its worst one-day decline in over a year on July 29, after the Federal Reserve decided to keep interest rates unchanged despite growing inflationary pressures.

The Dow Jones Industrial Average plummeted by more than 1,100 points, marking its worst day since April 2025 when President Donald Trump announced his tariffs. The S&P 500 index declined by 1.5% and the Nasdaq (NDAQ) index fell by 1.7%

The Federal Reserve's decision was a surprise to many, as the market had been pricing in two 25-basis point rate hikes this year. However, three members of the Fed's board dissented and voted to raise interest rates, while the majority, including new Chairman Kevin Warsh, elected to leave rates unchanged.

The reaction from the bond and stock markets indicates concerns about the credibility of new Fed Chair Kevin Warsh, who was appointed by Donald Trump. Analysts say that Warsh might be more interested in appeasing Trump than doing what's best for the US economy.