US MARKET CLOSE | Fed Raises Rates 25 Basis Points to 3.75%-4.00%, Warsh Says Inflation Too High for Too Long

17/09 08:01

The Federal Reserve raised its benchmark interest rate by 25 basis points to a range of 3.75%-4.00%, its first hike in three years and the first under Chair Kevin Warsh, according to Sina Finance. Warsh said he and his fellow policymakers were dissatisfied with the current pace of inflation, stating that price stability is their main focus and that inflation is too high and has been too high for too long. US stocks opened higher but closed lower, with the Dow down 1.21%, the S&P 500 down 0.44% and the Nasdaq down 0.01%. Intel rose 4.03%, Ciena rose 1.91%, Coherent Corp gained 6.81%, Lumentum Holdings Inc. climbed 9.59% and CoreWeave rose 3.00%. Among the "Magnificent Seven," Meta Platforms rose 0.46%, Google fell 0.61%, Nvidia rose 0.82%, Apple gained 0.32%, Tesla rose 0.42%, Amazon fell 0.99% and Microsoft dropped 1.37%. US August Consumer Price Index (CPI) eased on a year-over-year basis, falling below the recent high of 4.2%. Monthly CPI rose 0.4%, in line with market expectations, while core CPI, excluding volatile food and energy, rose 0.3% month over month, above expectations. Oil prices fell sharply on September 16: NYMEX light crude for October delivery fell $3.40 to settle at $102.43 a barrel, down 3.21%, while Brent crude for November delivery in London fell $2.92 to settle at $105.83 a barrel, down 2.69%. On strategist outlooks, Jefferies projected the S&P 500 will surge to 8,000 by year-end and reach 9,000 in 2027, driven by the AI investment boom and better-than-expected corporate earnings, though it flagged two key risks: a substantial slowdown in AI-related earnings growth and a continued rise in the 10-year Treasury yield. Wells Fargo chief equity strategist Ohsung Kwon cut the year-end S&P 500 target to 7,700 from 7,950 and lowered the technology sector to equal weight from overweight, citing the upcoming midterm elections as a growing risk, particularly amid rising opposition to data center development. Ed Yardeni cut his year-end S&P 500 target to 7,900 from 8,400 and set a mid-2027 target of 8,400. Separately, the head of the world's best-performing sovereign wealth fund warned of a possible pullback in US equities. Jo Townsend, chief executive of New Zealand's Super Fund, which manages the country's $54 billion sovereign wealth fund, said that although 2026 performance was exceptional, the high returns investors have enjoyed in recent years will likely decline, and she expects mean reversion at some point. Her view echoed a recent warning from Nicolai Tangen, chief executive of Norges Bank Investment Management, which runs Norway's sovereign wealth fund.

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US MARKET CLOSE | Fed Raises Rates 25 Basis Points to 3.75%-4.00%, Warsh Says Inflation Too High for Too Long

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