US stocks plummet 1.6 per cent after Fed shakes markets with another rate hike

ISTANBUL: Major US stock market indexes plummeted 1.6 per cent Wednesday after the Federal Reserve shook the markets with another interest rate hike.

The tech-heavy Nasdaq decreased 190 points, or 1.6 per cent, to 11,669.

The Fed earlier raised its benchmark interest rate by another 25 basis points despite a banking crisis causing turmoil in the US financial sector after the sudden demise of four banks in a matter of weeks, reported Anadolu.

Although Fed Chair Jerome Powell said "isolated banking problems, if left unaddressed, can undermine confidence in healthy banks and threaten the ability of the banking system as a whole," he said it is "too early" to assess the effect of the banking crisis.

Powell underlined that he is still optimistic about a soft landing -- a situation where the bank raises rates too much and too high that leads to an economic slowdown but avoids a recession.

The VIX volatility index, also known as the fear index, rose 4.1 per cent to 22.26, while the 10-year US Treasury yield fell 4.3 per cent to 3.451 per cent.

The dollar index fell 0.7 per cent to 102.54, while the euro added 0.04 per cent to US$1.0859 against the greenback.

Precious metals were in positive territory as gold rose 1.5 per cent to US$1,969 per ounce and silver gained 2.6 per cent to US$22.99.

Oil prices were mixed, with global benchmark Brent crude steady at US$75.80 per barrel and US benchmark West Texas Intermediate crude at US$69.92.

--BERNAMA-ANADOLU