USA stocks end mostly lower after Fed rate hike

Alphabet traded down 2.2% after being downgraded to hold in the stock market today

USA retail sales recorded their biggest drop in 16 months, while consumer prices fell unexpectedly in May, raising questions about the Fed's ability to further tighten monetary policy.

USA stocks dipped Wednesday as investors anxious about weak retail sales and oil prices sank.

Analysts said lacklustre data on United States homebuilder sentiment and industrial production dented confidence in light of the Federal Reserve's decision on Wednesday to raise the benchmark lending rate for the third time in six months, and signal an additional hike later this year.

At 8:33 a.m. ET, Dow e-minis were up 25 points, or 0.12 percent, with 7,053 contracts changing hands.

"With the weak data, you start to wonder why the Fed is so bent on raising rate".

The economic data also pressured the dollar index, which fell to its lowest since November 9.

"The market should take confidence in the fact that they're being very transparent in setting clear policy steps in terms of how they normalize the balance sheet", said Heidi Learner, chief economist for Savills Studley, a unit of Savills Plc, in NY.




"I think some Fed members are going to be skeptical about raising rates for the third time later this year, but I don't think they will step up and say they shouldn't be doing it today".

Stocks continued to report losses following the Fed's announcement it will increase its federal funds rate and also reduce its balance sheet which will begin to slightly increase fixed-income product yields. The S&P 500 fell 0.7% and the tech-heavy Nasdaq Composite lost 1.3%.

The Dow Jones closed up 0.22% at 21,374.56, while the wider S&P 500 index fell 0.10% to 2,437.92. The Dow Jones Small-Cap Growth TSM Index closed at 8,470.00 for a loss of 53.04 points or 0.62%. The stocks provided the biggest boost to the S&P and the Dow.

Plus, Whole Foods stock dragged down; 2 tech stocks to buy on the dip; and a big win for Microsoft options traders.

Facebook, Mircosoft and Alphabet, which had been hit hard by a selloff in the tech sector earlier this week, rose for the second straight day.

Advancing issues outnumbered decliners on the NYSE by 1,356 to 1,247. August-dated gold futures fell $21.30, or 1.7%, to settle at $1,254.60 an ounce.

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