Stock market today: Markets slip after latest Fed rate hike

May 3, 2023  -NEW YORK (AP) — Stocks are shifting lower Wednesday after the Federal Reserve announced its latest hike to interest rates but hinted the end to them may be near.

The S&P 500 was down 0.7% in late trading, and it drifted between modest gains and losses immediately after the Fed’s announcement. The Dow Jones Industrial Average was down 249 points, or 0.7%, at 33,426, as of 3:42 p.m. Eastern time, while the Nasdaq composite was down 0.4%.

The move was widely expected, and it’s supposed to slow the economy further in hopes of getting inflation under control. The hope on Wall Street is that this is the final increase following the Fed’s fastest flurry in decades. The central bank gave a nod toward the possibility in its statement, where it dropped a reference saying it “anticipates that some additional policy firming may be appropriate.”

“That’s a meaningful change,” Fed Chair Jerome Powell said.

But the Fed stopped short of declaring the end to rate hikes, which have already caused cracks in the U.S. banking system and sent stock prices well below their record heights. Powell also said that even though traders are hoping for cuts to rates later this year, which can act like steroids for markets, he doesn’t expect them to happen this year.