- A 'forgotten' valley in storm-hit North Carolina, desperate for help
- Italy targets climate activists in 'anti-Gandhi' demo clampdown
- US trade chief defends tariff hikes when paired with investment
- EU court blocks French ban on vegetable 'steak' labelling
- Meta AI turns pictures into videos with sound
- US dockworkers return to ports after three-day strike
- DR Congo to begin mpox vaccination campaign Saturday in east
- Meta must limit data use for targeted ads: EU court
- Oil extends gains, jobs report lifts Wall Street
- US hiring soars past expectations in sign of resilient market
- As EU targets Chinese cars, European rivals sputter
- Top EU court finds against FIFA in key transfer market ruling
- Oil extends gains, Hong Kong stocks resume rally
- 'A man provides': Ukrainian miners send families away as Russia advances
- EU states greenlight extra tariffs on EVs from China
- Hong Kong stocks resume rally, oil dips after Middle East-fuelled surge
- Crude stable after Israel-Iran surge, Hong Kong stocks resume gains
- Hera spacecraft to probe asteroid deflected by defence test
- US dockworkers to head back to work after tentative deal
- After Helene's destruction, North Carolina starts to rebuild
- Dockers end three-day strike at Montreal port
- What next for OpenAI after $157 billion bonanza?
- Israel-Hamas war causes 86-percent dive in Gaza GDP: IMF
- Milan's Morata moves house after Inter-fan town mayor 'violates' privacy
- 'Devastating' storm hits Augusta National but Masters will go on
- Relief in Brazil, Asia over delay to EU deforestation rules
- Oil prices jump, stocks fall on Middle East tensions
- Biden says 'discussing' possible Israeli strikes on Iran oil facilities
- Oil prices rise, stocks fall on Middle East tensions
- Oil rallies, stocks mostly retreat on Middle East tensions
- Phasing out teen smoking could save 1.2 mn lives: study
- 'Welcome relief': Asia producers hail EU deforestation law delay
- Japan PM slated to announce plans for 'happiness index'
- Turkish inflation falls less than expected in September at 49.4%
- Easing inflation lifts profit at UK supermarket Tesco
- Skiing calls on UN climate science to combat melting future
- China wine industry looks to breed climate resilience
- Tokyo rallies on weak yen, Hong Kong drops after surge
- Dutch airline KLM unveils 'firm' cost-cutting measures
- Carpe diem: the Costa Rican women turning fish into fashion
- Senegal looks to aquaculture as fish stocks dwindle
- Will AI one day win a Nobel Prize?
- Climate change, economics muddy West's drive to curb Chinese EVs
- Argentina's Milei vetoes university budget after huge protests
- TotalEnergies plans to grow oil and gas production until 2030
- 2024 Nobels offer glimmer of hope as global crises mount
- Tokyo rallies on weak yen, Hong Kong reverses after surge
- Tunisia readies for vote as incumbent Saied eyes victory
- High childcare costs in US weigh on women's employment
- US voters seek help with crushing childcare costs
US stocks fall, dollar gains as Fed unveils latest big rate hike
Wall Street stocks tumbled and the dollar rallied Wednesday after the Federal Reserve announced another large interest rate increase and signaled it expects more monetary tightening ahead to fight inflation.
The US central bank announced its third consecutive interest rate increase of 0.75 percentage point, continuing the forceful action to tamp down inflation that has surged to the highest in 40 years.
US stocks had climbed ahead of the announcement, following positive sessions on leading European bourses and declines in Asia.
Equities gyrated after the Fed press release before taking a final decisive push lower during Fed Chair Jerome Powell's news conference. The S&P 500 ended down 1.7 percent.
"The higher-for-longer narrative kicked in," Art Hogan, analyst of B. Riley Wealth Management, said of the market's reaction to an announcement that was more "hawkish" than expected.
Markets had been expecting another big interest rate increase, but were caught off guard by the Fed's outlook as far as the need for additional hikes.
The latest Fed statement included interest rate projections for the end of 2023 and 2024 that are higher than the previous forecasts, signaling the US central bank now sees the need for a more prolonged monetary tightening cycle in light of inflation trends.
Powell emphasized the need for a "restrictive" monetary policy.
He acknowledged that bringing inflation down will require a period of slower growth and higher unemployment, noting that the job market is out of sync, with far more openings than workers.
"We have got to get inflation behind us," Powell said. "I wish there were a painless way to do that. There isn't."
"The Fed is having to be cruel in order to restore price stability," noted Russ Mould, investment director at AJ Bell.
"Higher rates will cause pain to households and businesses, with the jobs market being closely watched for signs of redundancies and hiring freezes."
The Fed announcement also boosted the dollar, which hit a near 20-year peak against the euro.
"Once again, the Fed's hawkish rate guidance kept the dollar biased higher as it distinguishes America's central bank from its less aggressive counterparts abroad," said Convera's Joseph Manimbo.
The British pound also tumbled, even as the Bank of England prepares to announce its own large interest rate hike Thursday.
Although European and US equity indices were advancing ahead of the Fed's decision, City Index analyst Fawad Razaqzada said he believes "the path of least resistance is to the downside and the selling pressure will likely resume amid a bearish macro-outlook."
Elsewhere, oil prices finished lower on worries about weakening US demand, reversing a rally earlier on worries about the escalating Russia-Ukraine conflict after President Vladimir Putin called up Russian military reservists.
- Key figures at around 2030 GMT -
New York - Dow: DOWN 1.7 percent at 30,183.78 (close)
New York - S&P 500: DOWN 1.7 percent at 3,789.93 (close)
New York - Nasdaq: DOWN 1.8 percent at 11,220.19 (close)
London - FTSE 100: UP 0.6 percent at 7,237.64 (close)
Frankfurt - DAX: UP 0.8 percent at 12,6767.15 (close)
Paris - CAC 40: UP 0.9 percent at 6,031.33 (close)
EURO STOXX 50: UP 0.7 percent at 3,491.87 (close)
Tokyo - Nikkei 225: DOWN 1.4 percent at 27,313.13 (close)
Hong Kong - Hang Seng Index: DOWN 1.8 percent at 18,444.62 (close)
Shanghai - Composite: DOWN 0.2 percent at 3,117.18 (close)
Pound/dollar: DOWN at $1.1275 from $1.1381 Tuesday
Euro/dollar: DOWN at $0.9847 from $0.9971
Euro/pound: DOWN at 87.31 pence from 87.61 pence
Dollar/yen: UP at 144.02 yen from 143.75 yen
Brent North Sea crude: DOWN 0.9 percent at $89.83 per barrel
West Texas Intermediate: DOWN 1.2 percent at $82.94 per barrel
burs-jmb/bfm
H.Müller--CPN