Wall Street ends sharply lower after Fed keeps rates unchanged

2026-03-18 - 22:31

All of the 11 S&P 500 sector indexes declined, led lower by consumer staples, down 2.44%. (EPA Images pic) NEW YORK: Wall Street ended sharply lower on Wednesday after the Federal Reserve held US interest rates steady and projected only a single rate cut for the year as officials took stock of economic risks from surging oil prices and the US and Israeli war with Iran. New projections from US central bank policymakers showed the Fed’s benchmark overnight interest rate would fall by just a quarter of a percentage point by the end of this year, with no hint of timing. Major stock indexes extended declines after Fed Chair Jerome Powell held a news conference and reiterated the uncertainty the war creates for the economic outlook. Economists had not expected the Fed to change its interest rate. “The Fed is on hold. With inflation running above target and the economy running above trend, and elevated uncertainty about the path of the Iran war, there is no argument for easing policy,” said Michael Rosen, chief investment officer at Angeles Investments in Santa Monica, California. “The bigger challenge for the Fed, exacerbated by the war, is balancing its dual mandate of full employment and low, stable inflation. Should the war persist and oil prices remain high, it will cause economic slowing. But easing monetary policy would be a mistake as that would only fuel inflation.” Earlier, the US labour department said the Producer Price Index rose 3.4% year-on-year, exceeding economists’ 2.9% forecast, with prices at risk of accelerating further as the Middle East conflict lifts shipping and oil costs. Brent crude extended gains and reached near US$110 a barrel after an Iranian news agency reported that some facilities belonging to Iran’s oil industry in South Pars and Asaluyeh were attacked. The S&P 500 declined 1.36% to end the session at 6,624.70 points, its lowest close in nearly four months. It is now down about 3% in 2026. The Nasdaq declined 1.46% to 22,152.42 points, while the Dow Jones Industrial Average declined 1.63% to 46,225.15 points. All of the 11 S&P 500 sector indexes declined, led lower by consumer staples, down 2.44%, followed by a 2.32% loss in consumer discretionary. AMD gained 1.6% after agreeing with Samsung Electronics to expand their strategic partnership on memory chip supplies for AI infrastructure. Nvidia dipped 0.8% after securing Beijing’s approval to sell its second-most-powerful artificial intelligence chips in China. Micron Technology dipped about 0.5% in extended trade after the memory chipmaker beat Wall Street estimates for quarterly revenue, benefiting from a surge in demand for its memory chips used in artificial intelligence hardware. Asset manager Apollo Global Management rose 2.1%, rebounding from sharp losses in the previous week on private credit quality concerns. Lululemon surged 3.8% after the yoga-wear maker’s quarterly results. Founder Chip Wilson, who is in a proxy battle with the company, said lead director David Mussafer’s decision to exit the board was “a step in the right direction”, and reiterated the need for a “substantial” board refresh. Macy’s jumped 4.7% after the department store chain said it expected a comparatively smaller impact from tariffs in the second half of the year and beat quarterly profit estimates. Declining stocks outnumbered rising ones within the S&P 500 by a 5.2-to-one ratio. The S&P 500 posted 17 new highs and 15 new lows; the Nasdaq recorded 42 new highs and 218 new lows. Volume on US exchanges was relatively light, with 19.4 billion shares traded, compared to an average of 19.8 billion shares over the previous 20 sessions.