US stocks fall as the Dow loses 1.2% after Fed rate hike

US stocks closed lower on Wednesday, 16 September 2026, after the Federal Reserve delivered its first interest-rate hike in three years. The Dow Jones Industrial Average dropped 1.2% to 51,461 points. The S&P 500 fell 0.45% to 7,551 points, while the Nasdaq slipped 0.01% to 25,978 points.

The Federal Reserve voted unanimously to raise interest rates by a quarter of a percentage point, placing them in a target range of 3.75% to 4%. The central bank stated that inflation remains elevated and that the move would help return it to its 2% target, signalling another rate hike before year-end. Markets turned negative after Federal Reserve Chair Kevin Warsh said in a press conference that US inflation is not improving.

Following the rate announcement, the yield on the 10-year US Treasury note rose to 5%, its highest level since July 2007, while the 30-year yield reached 5.35%. In foreign exchange markets, the US dollar gained ground against other currencies, leaving the euro trading at 1.147 dollars.

Spot gold gave up morning gains of roughly 1.6%, falling from an intraday high of about 4,365 dollars per ounce to close at 4,240 dollars. West Texas Intermediate crude fell from 105 dollars to 102 dollars per barrel. Across sectors, energy and financials posted the biggest drops, falling 2.97% and 1.6% respectively, while technology gained 0.1%.