S&P 500 falls, yields rise following Fed announcement

NEW YORK, June 17 : Major stock indexes fell, bond yields rose and the U.S. dollar extended gains against the euro on Wednesday after the Federal Reserve held the benchmark interest rate steady and new projections showed officials expect a hike in borrowing costs later this year amid increasing inflation concerns.

It was the first rate statement under new Fed Chairman Kevin Warsh.

"The chances are, as was widely expected, that there's probably not going to be a rate cut this year. This further confirms that," said Ryan Detrick, chief market strategist at Carson Group in Omaha.

"Now the question becomes," Detrick said, "will we really see a hike or is the Fed on pause the rest of this year?"

Treasury yields were little changed earlier in the day. The yield on benchmark U.S. 10-year notes was last up 3.91 basis points at 4.467 per cent, from 4.428 per cent late on Tuesday.

The Dow Jones Industrial Average fell 525.67 points, or 1.01 per cent, to 51,474.00, the S&P 500 fell 96.15 points, or 1.28 per cent, to 7,415.20 and the Nasdaq Composite fell 382.32 points, or 1.45 per cent, to 25,994.03.

SpaceX shares were down for the first time since the stock's market debut last Friday. The stock was last down 1.8 per cent.

MSCI's gauge of stocks across the globe fell 4.04 points, or 0.36 per cent, to 1,124.26.The pan-European STOXX 600 index ended up 0.52 per cent.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.44 per cent to 99.99, with the euro down 0.48 per cent at $1.1551.

Oil prices were higher as U.S. President Donald Trump said his new ceasefire agreement with Iran was not final and he could resume the war if he becomes unsatisfied.

Recent declines in oil prices had begun to ease worries about an economic slowdown especially in energy-importing Europe. The International Energy Agency said the oil market will move into a significant supply surplus in 2027 after recovering from the closure of the Strait of Hormuz.