Stocks Turn Lower As Fed Hikes Rates by 0.50%
3:20 pm Wednesday, December 14th, 2022
US stocks turned lower and Treasury yields rose after the Federal Reserve’s latest rate decision signaled the central bank sees work left to do in its battle against inflation.
Stocks had rallied more than 6% since the last rate decision on the expectation that the central bank would be able to slow and possibly stop its tightening next year. That view took a hit with officials’ latest projections that the Fed funds rate will top 5% in 2023. The two-year Treasury yield edged higher.
Fed policy makers remain divided over how much higher they will need to raise rates next year and how long to hold them at that level, The Wall Street Journal has reported.
Investors also remain cautious about the outlook for the economy and anticipate the run-up in borrowing costs will begin to weigh on corporate profits and consumers in the coming months.
Among specific movers in trading Wednesday, Sofi (SOFI) shares jumped more than 8% after a regulatory filing showed Chief Executive Officer Anthony Noto recently purchased $5 million worth of company shares.
Shares of Charter Communications (CHTR) tumbled nearly 14% following a wave of downgrades that came after the telecom giant announced plans during its investor day to spend big in coming years on a high-speed internet upgrade — starting with $10.7 billion in 2023, more than analysts expected.
Tesla (TSLA) continued a downshift after falling more than 4% in the previous session despite gains across the broader indexes following lighter CPI data. Declines in Tesla on Wednesday came following a price cut from Goldman Sachs and continued selling pressure over concerns around CEO Elon Musk’s management of Twitter.
