US Stocks Dip As Fed Inches Closer To Policy Shift

Wall Street stocks declined on Wednesday as the Federal Reserve edged a bit closer to tightening monetary policy while adopting a broadly dovish response to recent signs of inflation.

Shares hit session lows shortly after the US central bank raised its inflation and growth forecast and released projections that showed a majority of Fed officials expect interest rate hikes in 2023.

However, equities recovered somewhat during Fed Chair Jay Powell's press conference during which he emphasised that he views recent price hikes as temporary, and that steps to restrict monetary supply are not imminent.

Jason Schenker of Prestige Economics said the overall message was "highly accommodative," but included "some hawkish changes at the margin."

The Dow Jones finished at 34,033, down 0.8 percent.

The S&P 500 ended down 0.5 percent at 4,223, while the Nasdaq lost 0.2 percent at 14,039.

Large banks mostly rose, with JPMorgan Chase up 0.7 percent and Bank of America gaining 0.6 percent as long-term bond yields climbed following the Fed announcement.

Among individual companies, General Motors jumped 1.6 percent as it again lifted its investment plan for electric and autonomous vehicle technology. The auto giant now expects to spend US$35 billion through 2025, up 30 percent from its prior plan.

Oracle slumped 5.6 percent despite reporting better-than-expected results. Analysts expressed disappointment with the software giant's forecast. (AFP)