S&P 500 Drops 2.5% As Powell Says It Is Premature To Pause Rate Hikes

S&P 500 Declines While Powell Remains Bullish

As a result of Powell's remarks during the press conference, the S&P 500 came under intense pressure and pushed towards the 3760 level. The Nasdaq Composite fell by 3.36 percent.

According to expert opinion, the Fed increased the interest rate by 75 basis points today. The first response to the FOMC statement was favorable since the Fed said that it will consider the delays between monetary policy's effects on inflation and economic activity. This speech was seen by traders as an indication that the Fed would proceed carefully after hiking rates rapidly.

Powell's remarks, though, suggested that the Fed was still leaning hawkish. It would be quite rash to stop raising rates, according to the Fed Chair. The Fed will maintain its path until the task was completed, he further assured.

Powell said that since the Fed has the means to significantly bolster the economy, over-tightening would not be a major issue. Increasing interest rates too much, however, might result in inflation that becomes entrenched and damage the economy. The prospects of a gentle landing have decreased, according to the Fed Chair.

It should come as no surprise that these remarks placed a lot of pressure on the stock market. Companies like Apple, Microsoft, Alphabet, Amazon, and Tesla, which were down by 3-5% in today's trading session, were among the stocks that led the sell-off.

Traders focused on the Qualcomm report after the market closing. The company's $11.4 billion in sales and $3.13 per share in adjusted profits were much in line with analyst expectations. In its revised forecast, the business now projects first-quarter fiscal year 2023 sales of $9.2 billion to $10 billion and adjusted profits of $2.25 to $2.45 per share. The market did not appreciate the revised outlook, and the stock fell more than 5% in after-hours trading.