PrintUS STOCKS-Wall Street ends sharply lower after Fed keeps rates unchanged
BY Reuters | ECONOMIC | 04:38 PM EDT* Crude prices reverse losses; Brent last up over 5%
* Fed holds rates steady, as expected
* Micron climbs ahead of report
* S&P 500 -1.36%, Nasdaq -1.46%, Dow -1.63% (Updates with closing stock moves, investor comment)
By Noel Randewich and Utkarsh Hathi
March 18 (Reuters) - Wall Street ended sharply lower on Wednesday after the Federal Reserve held U.S. interest rates steady and projected only a single rate cut for the year as officials took stock of economic risks from surging oil prices and the U.S. and Israeli war with Iran.
New projections from U.S. central bank policymakers showed the Fed's benchmark overnight interest rate would fall by just a quarter of a percentage point by the end of this year, with no hint of timing.
Major stock indexes extended declines after Fed Chair Jerome Powell held a news conference and reiterated the uncertainty the war creates for the economic outlook.
Economists had not expected the Fed to change its interest rate.
"The Fed is on hold. With inflation running above target and the economy running above trend, and elevated uncertainty about the path of the Iran war, there is no argument for easing policy," said Michael Rosen, chief investment officer at Angeles Investments in Santa Monica, California.
"The bigger challenge for the Fed, exacerbated by the war, is balancing its dual mandate of full employment and low, stable inflation. Should the war persist and oil prices remain high, it will cause economic slowing. But easing monetary policy would be a mistake as that would only fuel inflation."
Earlier, the U.S. Labor Department said the Producer Price Index rose 3.4% year-on-year, exceeding economists' 2.9% forecast, with prices at risk of accelerating further as the Middle East conflict lifts shipping and oil costs.
Brent crude extended gains and reached near $110 a barrel after an Iranian news agency reported that some facilities belonging to Iran's oil industry in South Pars and Asaluyeh were attacked.
The S&P 500 declined 1.36% to end the session at 6,624.70 points, its lowest close in nearly four months. It is now down about 3% in 2026.
The Nasdaq declined 1.46% to 22,152.42 points, while the Dow Jones Industrial Average declined 1.63% to 46,225.15 points.
All of the 11 S&P 500 sector indexes declined, led lower by consumer staples, down 2.44%, followed by a 2.32% loss in consumer discretionary.
AMD gained 1.6% after agreeing with Samsung
Electronics
Micron Technology
Asset manager Apollo Global Management
Lululemon surged 3.8% after the yoga-wear maker's quarterly results. Founder Chip Wilson, who is in a proxy battle with the company, said lead director David Mussafer's decision to exit the board was "a step in the right direction", and reiterated the need for a "substantial" board refresh.
Macy's jumped 4.7% after the department store chain said it expected a comparatively smaller impact from tariffs in the second half of the year and beat quarterly profit estimates.
Declining stocks outnumbered rising ones within the S&P 500 by a 5.2-to-one ratio.
The S&P 500 posted 17 new highs and 15 new lows; the Nasdaq recorded 42 new highs and 218 new lows.
Volume on U.S. exchanges was relatively light, with 19.4 billion shares traded, compared to an average of 19.8 billion shares over the previous 20 sessions.
(Reporting by Johann M Cherian and Utkarsh Hathi in Bengaluru, and by Noel Randewich in San Francisco; Editing by Anil D'Silva, Maju Samuel and David Gregorio)
