US: Stocks end lower as Federal Reserve signals more rate hikes ahead

WALL Street stocks fell on Wednesday after the Federal Reserve sketched out plans for additional interest rate hikes despite recent data showing a moderation in inflation.

Fed Chair Jerome Powell said he was encouraged by the latest consumer price data, but that the central bank’s policy was “still not restrictive enough” in light of too-high inflation.

The Dow Jones Industrial Average finished down 0.4 per cent at 33,966.35. The broad-based S&P 500 shed 0.6 per cent lower to 3,995.32, while the tech-rich Nasdaq Composite Index declined 0.8 per cent to 11,170.89. The US central bank, as expected, announced it would lift the benchmark lending rate by a half percentage point, a smaller hike after four straight 0.75-point increases. Powell said wage inflation was still too pronounced to permit a pivot on monetary policy. While consumer inflation eased in October and November, Powell said “it will take substantially more evidence to give confidence that inflation is on a sustained downward path.”

The Fed’s announcement “certainly did not live up to the market’s more hopeful expectations that the Fed might throw the market a carrot,” said Briefing.com analyst Patrick O’Hare, who characterised the thrust of the central bank’s announcements as “hawkish-minded.”

Among individual companies, Delta Air Lines rose 2.8 per cent as it raised its fourth-quarter financial forecasts and predicted solid earnings growth in 2023. “Demand for air travel remains robust as we exit the year and Delta’s momentum is building,” said chief executive Ed Bastian. Charter Communications sank 16.4 per cent after the company’s plan to significantly increase capital spending raised doubts about its free cash position. AFP