Fed Rate Rise Sends US Stock Markets Into Reverse

Wall Street stocks finished lower on Wednesday after the Federal Reserve lifted interest rates for a second time this year and signaled a more aggressive pace of additional hikes as the economy strengthens and inflation gathers pace.

The Fed also signaled that two more hikes are coming in 2018 and four in 2019, a possible sign of concern about accelerating inflation.

Stocks were also pressured by revived trade war fears on a report that President Donald Trump's administration would proceed with tariffs on Chinese goods.

The Dow Jones Industrial Average fell 0.5 percent to finish at 25,201.

The S&P 500 shed 0.3 percent to 2,778, and the Nasdaq Composite Index dipped 0.1 percent to 7,695, retreating from Tuesday's record.

The Fed’s latest move brings the federal funds rate to a range of 1.75-2.0 percent, but the quarterly economic forecasts show central bankers now expect the rate to end the year at 2.4 percent rather than the 2.1 percent projected in March. (AP, AFP)