Dow Crashes Over 800 Points as Fed Raises Rates Amid Hawkish Sentiment

The Dow Jones Industrial Average plummeted on the 16th after the Federal Reserve decided to raise interest rates for the first time in three years and two months. The decline exceeded 800 points at one point, with selling concentrated in financial stocks.

Federal Reserve Chair Kevin Warsh's press conference was seen as hawkish, and the 10-year Treasury yield briefly broke back above 5%. The Fed voted unanimously to raise the target range for the federal funds rate by 0.25 percentage point to 3.75%, 4.0%, the first hike since July 2023.

The market had largely priced in the rate hike, but concerns about inflation and economic slowdown triggered selling. Financial stocks such as Goldman Sachs and American Express fell nearly 4%, dragging down the index. The S&P 500 also declined.