U.S. Stocks Move Sharply Lower As Fed Casts Doubt On March Rate Cut

Stocks moved sharply lower over the course of the trading day on Wednesday, with the major averages all moving to the downside following the mixed performance seen in the previous session. The tech-heavy Nasdaq posted a particularly steep loss, extending the notable pullback seen on Tuesday.

The major averages finished the session near their worst levels of the day. The Nasdaq plunged 345.89 points or 2.2 percent to 15,164.01, the S&P 500 tumbled 79.32 points or 1.6 percent to 4,845.65 and the Dow slid 317.01 points or 0.8 percent to 38,150.30.

Tech stocks led the way lower early in the session, but selling pressure became more broad based following the Federal Reserve’s highly anticipated monetary policy announcement.

The Fed announced its widely expected decision to maintain the target range for the federal funds rate at 5.25 to 5.50 percent in support of its dual goals of maximum employment and inflation at the rate of 2 percent over the longer run.

The decision to leave rates unchanged came as the Fed acknowledged inflation has eased over the past year but said it remains elevated.

The central bank also described economic growth as solid while noting job gains have moderated since early last year but remain strong.

The Fed’s statement notably removed the reference to “any additional policy firming that may be appropriate.”

However, the Fed also said it does not expect it will be appropriate to lower rates until it has gained greater confidence that inflation is moving sustainably toward 2 percent.

Fed Chair Jerome Powell reiterated those sentiments in his post-meeting press conference and said he doesn’t think it’s likely the central bank will reach that level of confidence by the time of the March meeting.

Following the announcement, the chances of a 25 basis point rate cut in March have fallen to 35.5 percent, according to CME Group’s FedWatch Tool.

A steep drop by shares of Alphabet (GOOGL) weighed on the tech sector early in the session, with the Google parent…