US Stocks Plummet as Fed Holds Rates Steady Amid Rising Inflation

US stocks plummeted on Wednesday after the Federal Reserve decided to maintain interest rates at 3.5% to 3.75%, despite rising inflation above its target of 2%. The Dow Jones Industrial Average dropped by over 1,100 points, while the Nasdaq and S&P 500 each lost more than 1.5%.

The Fed's decision was met with a mixture of reactions from investors, who were also concerned about renewed fighting in the Middle East and rising oil prices. Brent crude oil surged above $91 a barrel after a four-day pause in hostilities, having previously reached as low as $72 this month.

Investors were also worried about the impact of heavy spending on artificial intelligence by major technology companies, new tariffs announced by President Donald Trump earlier this month, and a sell-off in chip stocks.