Stocks slide after Fed pauses, hints at higher interest rates for longer: Stock market news today

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Stocks moved lower Wednesday as Wall Street digested the Federal Reserve’s decision to hold interest rates steady — yet forecast one more rate hike to come within 2023’s final two meetings and hinted they could stay higher for longer.

The Dow Jones Industrial Average (^DJI) closed down 0.2%. The S&P 500 (^GSPC) lost almost 1%, while the tech-heavy Nasdaq Composite (^IXIC) was down almost 1.5%.

Wall Street’s focus on the Fed turned to what would happen in the future: whether it will return to raising borrowing costs this year, and when a rate cut could be in the cards. The central bank signaled one more hike would come before the end of the year, and it updated its forecast for the benchmark interest rate to show interest rates will now remain higher for longer than previously anticipated.

Read more: What a Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards

The recent soaring rally in oil prices, seen by some as a risk to the Fed’s efforts to cool inflation, pulled back somewhat on Wednesday as investors weighed how its policy decision might affect economic growth and fuel demand.

In another sign of a reviving US IPO market, Klaviyo (KVYO) made its debut Wednesday, on the heels of debuts by Arm (ARM) and Instacart (CART). The marketing automation company priced its offering above range at $30 a share, for a valuation of $9.2 billion.

Elsewhere, an unexpected slowdown in UK inflation boosted the odds that the Bank of England will pause increasing interest rates after making one last hike on Thursday. The British pound dropped after the August inflation report.

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