© Reuters
By Peter Nurse
Investing.com -- U.S. stocks closed lower on Wednesday as investors continued to digest the recent moves by the Federal Reserve ahead of President Joe Biden’s trip to Europe to discuss further sanctions on Russia. Falling bond yields hit bank shares.
At 4:16 PM ET, the Dow Jones Industrial Average was down 448 points, or 1.3%, while the S&P 500 was down 1.2% and the NASDAQ Composite was down 1.3%.
The three main indexes on Wall Street closed higher Tuesday, with the Dow climbing over 250 points, or 0.7%, the S&P rising 1.1% and the Nasdaq gaining 2%.
The Federal Reserve raised the benchmark lending rate by a quarter point at its meeting last week, the first increase since December 2018, and Chairman Jerome Powell pointed Monday to more aggressive moves in the future in order to combat soaring inflation.
San Francisco Federal Reserve President Mary Daly, normally seen as leaning toward the dovish end of the spectrum, added her voice Tuesday to those calling for the Fed to raise interest rates quickly.
Russia’s ongoing war with Ukraine and the associated sanctions have exacerbated already high energy and commodity prices, adding to the concerns the U.S. central bank has over domestic inflation.
President Joe Biden traveled to Europe Wednesday to meet with allies of the North Atlantic Treaty Organization and European Union to discuss the West’s response to Russia, amid expectations that further measures to punish Moscow are likely.
The war in Ukraine continued to rage on Wednesday, with Russian troops continuing to bombard the capital Kyiv, Chernihiv, and the Black Sea port of Mariupol.
In the corporate sector, Adobe (NASDAQ:ADBE) stock slipped premarket, the software giant beat its first quarter targets, but disappointed with its guidance, while BuzzFeed (NASDAQ:BZFD) stock was still ticking up after it announced job cuts and the departure of top editors.
Chinese social media and gaming giant Tencent Holdings (OTC:TCEHY) posted an 8% rise in fourth quarter revenue, its slowest growth since going public in 2004. General Mills (NYSE:GIS) and Cintas (NASDAQ:CTAS) also report results Wednesday.
Oil prices edged higher Wednesday after industry data pointed to another drop in U.S. crude inventories, while European countries continue to debate sanctions on Russian energy exports.
Tuesday’s numbers from the American Petroleum Institute showed crude stocks in the U.S., the world's biggest oil consumer, fell by 4.3 million barrels last week, confounding expectations for a small increase.
The official government data from the U.S. Energy Information Administration is due later in the session.
By 4:16 PM ET, U.S. crude futures traded 5% higher at $114.78 a barrel, while the Brent contract rose 5.3% to $121.65.
Additionally, gold futures rose 1.4% to $1,947/oz.
This story was originally published at 7:09 AM ET and updated.
