SPX: S&P 500 Leads Indexes Lower as Banks Stocks Tumble

The S&P 500, Dow Jones, and Nasdaq all declined by 1.6% or more due to the absence of a slowdown in rate hikes.

On Wednesday, the S&P 500 led a broad-based decline as investors digested a Federal Reserve statement, the Chair's press conference, and an alarming hearing from Treasury Secretary Janet Yellen. Let's dissect it and determine what transpired.

First, the US central bank raised interest rates by 25 basis points despite widespread calls for a rate cut due to turmoil in the banking sector. Fed Chair Jay Powell then dismissed hopes for a slowdown, stating that officials have no plans to reduce interest rates in 2023. But wait, that’s not all!

Treasury Secretary Janet Yellen told the Senate she is not in favour of expanding the FDIC’s coverage for deposits above $250,000. That means bank failures are once again extremely dangerous. In response to this confluence of events, the S&P 500 fell 1.65%, the Dow fell 1.63%, and the Nasdaq fell 1.6%.