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US STOCKS-Wall Street drops as Fed officials mull U.S. rate hikes in 2023

U.S. Federal Reserve Chairman Jerome Powell
Credit: Kevin Lamarque - Reuters / stock.adobe.com

All three main Wall Street indexes fell on Wednesday afternoon, as investors digested news from the Federal Reserve that it expects the first post-pandemic interest rate hikes to be sooner than forecast.

By David French

June 16 (Reuters) - All three main Wall Street indexes fell on Wednesday afternoon, as investors digested news from the Federal Reserve that it expects the first post-pandemic interest rate hikes to be sooner than forecast.

New projections saw most of 11 of 18 U.S. central bank officials pencil in at least two quarter-percentage-point rate increases for 2023, even as officials pledged in a statement to keep policy supportive for now to encourage a jobs recovery.

U.S. Treasury yields also rose on the news, with the benchmark 10-year yield US10YT=RR at its highest level in a week. The U.S. dollar also rose, with the dollar index .DXY, which tracks the greenback versus a basket of six currencies, hitting its highest level since May 6.

By 3:13 p.m. ET (1913 GMT), the Dow Jones Industrial Average .DJI fell 208.69 points, or 0.61%, to 34,090.64, the S&P 500 .SPX lost 17.17 points, or 0.40%, to 4,229.42 and the Nasdaq Composite .IXIC dropped 38.33 points, or 0.27%, to 14,034.52.

(Reporting by Shashank Nayar and Medha Singh in Bengaluru and David French in New York; Editing by David Gregorio, Marguerita Choy and Matthew Lewis)

((Shashank.Nayar@thomsonreuters.com; within U.S. +1 646 223 8780; outside U.S. +91 80 6182 2256;))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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