On June 17, the Dow Jones Industrial Average closed down 507.12 points, or 1.0%, at 51,492.55. The S&P 500 dropped 91.25 points, or 1.2%, to finish at 7,420.10, while the Nasdaq composite fell 354.68 points, or 1.3%, closing at 26,021.66.
The market's focus was on the first Federal Open Market Committee (FOMC) meeting under new Fed Chair Kevin Warsh. Although the Fed maintained its current interest rate range of 3.50% to 3.75%, some members indicated expectations for a rate hike later this year in the dot plot. Warsh's emphasis on the commitment to price stability also contributed to lowering expectations for rate cuts.
Treasury yields rose, with the two-year Treasury yield surpassing 4.1%, and the ten-year yield climbing to the mid-4.4% range. The rise in yields added pressure on growth and technology stocks, contributing to a downward trend in the overall market.
Most sectors in the S&P 500 showed weakness, particularly communication services, regional banks, and housing-related stocks. The prospect of prolonged high interest rates led to selling pressure in sectors burdened by financial costs.
Among individual stocks, SpaceX, which had seen gains following its recent IPO, fell about 5%. CME Group also experienced a decline following the announcement of its CEO's resignation. In contrast, some semiconductor and artificial intelligence infrastructure stocks showed relatively stable performance during the trading session.
Expectations for easing geopolitical tensions in the Middle East did not prevent the market's decline. While discussions between the U.S. and Iran regarding a ceasefire memorandum of understanding stabilized international oil prices, the Fed reaffirmed its priority on achieving its inflation targets, causing the market to react more sensitively to interest rate trajectories.
Looking ahead, the market is expected to gauge the Fed's potential for actual rate hikes based on upcoming inflation and employment data. As the Fed shifts its policy direction from expectations of rate cuts to the possibility of prolonged tightening, the New York Stock Exchange is likely to continue experiencing volatility linked to Treasury yields and inflation indicators.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.