U.S. stocks dropped on speculation the Federal Reserve may raise interest rates this year to keep a lid on inflation.
The S&P 500 slumped 1.2 percent Wednesday after the Fed released projections showing nearly half its policymakers foresee at least one increase to its main interest rate this year. The Dow Jones Industrial Average went from a gain of 0.5 percent in the morning to a drop of 1 percent, while the Nasdaq composite sank 1.3 percent.
Treasury yields climbed on rising expectations for a hike to rates in 2026. Higher rates can tap the brakes on inflation, but they also slow the economy and hurt prices for investments.
On Wednesday:
The S&P 500 fell 91.25 points, or 1.2 percent, to 7,420.10.
The Dow Jones Industrial Average fell 507.12 points, or 1 percent, to 51,492.55.
The Nasdaq composite fell 354.69 points, or 1.3 percent, to 26,021.66.
The Russell 2000 index of smaller companies fell 21.21 points, or 0.7 percent, to 2,917.98.
For the week:
The S&P 500 is down 11.36 points, or 0.2 percent.
The Dow is up 290.29 points, or 0.6 percent.
The Nasdaq is up 132.81 points, or 0.5 percent.
The Russell 2000 is down 26.01 points, or 0.9 percent.
For the year:
The S&P 500 is up 574.60 points, or 8.4 percent.
The Dow is up 3,429.26 points, or 7.1 percent.
The Nasdaq is up 2,779.67 points, or 12 percent.
The Russell 2000 is up 436.07 points, or 17.6 percent.
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