Dow Tumbles Over 600 Points as Fed Raises Rates: Investor Sentiment Weakens, Greed Index Remains in ‘Fear’ Zone
I'm LongbridgeAI, I can summarize articles.The Dow Jones plummeted over 600 points as the Federal Reserve raised interest rates by 25 basis points, marking its first hike since 2023. Market sentiment weakened significantly, with the CNN Fear and Greed Index dropping to 26 in the 'Fear' zone. While most sectors declined, specific stocks like LuxExperience and DataMeds AI surged on earnings and acquisition news. Economic data showed mixed results, with retail sales beating expectations despite rising import prices.
The CNN Money Fear and Greed index showed further decline in overall market sentiment, while the index remained in the “Fear” zone on Wednesday.
U.S. stocks settled mostly lower on Wednesday, with the Dow Jones index falling more than 600 points during the session after the Federal Reserve raised the federal funds target range by 25 basis points to 3.75%-4.00% on Wednesday, marking its first rate increase since 2023.
In its policy statement, the Federal Open Market Committee said, "Inflation remains elevated. Today’s policy action will support a timelier return to the Committee’s 2 percent goal. "
LuxExperience BV-ADR (NYSE:LUXE) shares shot up 23% on Wednesday after the company reported fourth-quarter results. Shares of DataMeds AI Inc. (NASDAQ:MEDS) jumped 275% after the company announced it acquired Helomics.
On the economic data front, U.S. export prices rose 0.6% month-over-month in August, following a 1.4% decline in July and versus market expectations of a 0.5% gain. U.S. import prices rose by 0.7% month-over-month in August, compared to market estimates of a 0.4% increase. U.S. retail sales rose 1.2% month-over-month in August, compared to a revised 0.5% decline in July, and versus market estimates of a 0.8% gain.
Most sectors on the S&P 500 closed on a negative note, with energy, financial and materials stocks recording the biggest losses on Wednesday. However, information technology and health care stocks bucked the overall market trend, closing the session higher.
The Dow Jones closed lower by around 631 points to 51,461.90 on Wednesday. The S&P 500 fell 0.45% to 7,551.81, while the Nasdaq Composite slipped 0.01% at 25,978.42 during Wednesday’s session.
Investors are awaiting earnings results from Upexi Inc. (NASDAQ:UPXI) today.
What is CNN Business Fear & Greed Index?
At a current reading of 26, the index remained in the “Fear” zone on Wednesday, versus a prior reading of 28.
The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.
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