The S&P 500 fell 0.51% on Thursday, extending losses for a second session after Federal Reserve officials signaled they may raise interest rates before year-end. The Dow Jones Industrial Average slipped 0.14% while the Nasdaq Composite declined 0.52%, as traders adjusted positioning following the Fed's updated projections.
The S&P 500 fell 0.51% on Thursday, extending its decline after Fed officials signaled a possible rate increase this year.
The Federal Reserve's updated projections, released Wednesday, showed policymakers expect the federal funds rate to end this year and the next two years at higher levels than previously forecast, according to the central bank's Summary of Economic Projections. Higher rates help contain inflation but also slow economic growth and reduce the present value of future corporate earnings.
The Dow Jones Industrial Average slipped 0.14% and the Nasdaq Composite fell 0.52%, with all three major benchmarks declining in tandem. The moves followed Wednesday's 0.6% drop in the S&P 500, which erased earlier gains after the Fed released its updated forecasts.
The back-to-back declines leave the S&P 500 on track for its first weekly loss in three weeks, with traders adjusting expectations for a potential rate increase at the Fed's July meeting. Markets will close Friday for the Juneteenth holiday, giving investors a four-day weekend to reassess positioning before trading resumes Monday.
The selloff followed the Fed's decision to hold rates steady while signaling the potential for future increases, with Chair Kevin Warsh presiding over his first meeting this week. The next Fed meeting is scheduled for July 28-29.
This article is for informational purposes only and does not constitute investment advice.
