Market Close: Fed Raises Rates, Signals More Hikes Ahead; Stocks Fall • 9/16/26

0:00See NBC Business News update market close. I'm Jessica Ettinger. Wall Street will open Thursday morning after the Fed raised interest rates for the first time in three years and stocks fell. The yield on the 10-year Treasury was above 5 % Wednesday, its highest in three years. U.S. crude oil dropping about 3%, but still hovering around$102 a barrel. The Dow on Wednesday down 631 points, led lower by shares of IBM down 4 percent, Goldman Sachs down more than 3 percent. The S &P 500 index was down 33 points, the Nasdaq falling just three points. Chipmaker shares mixed on Wednesday, saying inflation is still too high.

0:44The Federal Reserve raised the overnight bank lending interest rate by a quarter percentage point, pushing back on President Trump's efforts to get the group to lower interest rates. Here's CNBC senior economics reporter Steve Leisman. This was a well-anticipated rate hike by the market, but it still led to a sharp sell-off in stocks and especially bonds. As Fed Chairman Kevin Worsh, it looks like he offered a more hawkish outlook for rates than the markets expected. My judgment some weeks ago was the inflation summer trends weren't passing the test. I've seen very little information since that would make me reverse that decision, so I've stuck with it.

1:20With a 12-0 vote, he had the committee with him and a hike intended to support a timely return to the 2 % target, saying inflation remains elevated. And then this piece right here, 16 of the 18 members see at least one more hike this year. With the Fed increasing interest rates, Americans will pay a little more on credit card balances they're carrying and on any other adjustable rate loans they have. double lines. Jeffrey Gunlock tells CNBC he would have raised rates by a half percent instead of a quarter to really attack inflation. I worry that the inflation problem is not being fully respected.

1:58And Kevin Warsh really focused in the press conference on the fact that inflation is not falling. It's been too high for too long. And I would have just done the 50 and then see what the data does. U.S. crude oil back around$102 a barrel Wednesday compared to$68 a barrel before the U.S. war with Iran. U.S. drivers now paying a national average of$4.37 for a gallon of regular gas, according to AAA. Diesel hitting$6.31, a fresh record high. And the high diesel prices are slamming freight companies. Shares of J.B. Hunt dropped 12 percent Wednesday on a warning because of high fuel costs. There's something about this that is troubling to me to hear the CFO come on and say earnings are going to be down five to 10 percent because of those high diesel costs.

2:49This is problematic. Do not dismiss this. Is this the beginning of earnings degradation across the board attributable to rising energy costs? Virtus Investments, Joe Terranova on CNBC. Mortgage rates just a tick lower on Wednesday. Mortgage News Daily says the average rate on a 30-year home loan, 7.19 percent. And the homebuilders are feeling worse about their business. Here's CNBC's Diana Olick. Homebuilder sentiment dropped three points in September on the NIHB Wells Fargo Index. This is the lowest reading since last September when it was also 32. Builders cite high mortgage rates, labor shortages, and rising material costs.

3:29Now, mortgage rates, of course, have shot higher this month with the 30-year fix now at the highest rate in well over a year at 7 % according to Mortgage News Daily. On Thursday's watch list, we get another read on the new construction home business with housing starts and building permit numbers. We also get pending home sales. And we'll find out how many people applied for unemployment benefits last week. Jessica Edinger, CNBC. Building a portfolio with Fidelity Basket Portfolios is kind of like making a sandwich. It's as simple as picking your stocks and ETFs, sort of like your meats and other topics.

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