US stocks sold off sharply on Wednesday after the Federal Reserve held interest rates steady, with the Dow Jones Industrial Average falling more than 1,100 points and the other major benchmarks joining the slide. Dow futures were already under pressure as traders digested the central bank’s decision and the fact that three members voted for a rate hike.
The Dow Jones Industrial Average fell 2.2%, the S&P 500 lost 1.5% and the Nasdaq Composite sank about 1.7%, a broad retreat that showed how quickly the market shifted once the Fed chose not to move. Long-dated Treasury yields rose after the decision, adding another layer of pressure on stocks that were already sensitive to higher borrowing costs.
The search for answers was not just about the Fed. Oil prices also climbed amid renewed tensions in the Middle East, with Brent crude gaining more than 7% and trading back over $90 per barrel after hostilities paused on Friday and Iran launched what US Central Command described as an “attempted surprise attack” on Tuesday. That combination of higher yields and higher oil helped turn a policy day into a risk-off session across markets.
There was also a split inside the central bank. The Fed held steady even though three members voted for a hike, a sign that the debate over whether policy is restrictive enough is still active while inflation remains well above the Fed’s 2% target. In the same market, investors were already dumping chip stocks ahead of Big Tech earnings after SK Hynix said second quarter profit came in below Wall Street expectations and Alphabet’s capital expenditure guidance last week unsettled traders.
More earnings were due after the bell, with Microsoft and Meta set to report and results from Starbucks, Chipotle Mexican Grill, Qualcomm and Arm Holdings also scheduled. For now, the day’s verdict was clear: the Fed gave Wall Street no cut to cheer, and the combination of dissent, higher yields and geopolitical risk was enough to knock the market lower in one session.
