NEW YORK (AP) 鈥� Stocks closed lower on Wall Street after the Federal Reserve announced its latest hike to interest rates and hinted that the end to them may be near. The S&P 500 fell 0.7% Wednesday after drifting between modest gains and losses immediately after the Fed鈥檚 announcement. The Dow Jones Industrial Average fell 0.8% and the Nasdaq lost 0.5%. The Fed鈥檚 move, which was widely expected, is meant to slow the economy further in hopes of getting inflation under control. The hope among investors is that this is the final increase for now following the Fed鈥檚 fastest series of hikes in decades.
THIS IS A BREAKING NEWS UPDATE. AP鈥檚 earlier story follows below.
NEW YORK (AP) 鈥� Stocks are shifting lower Wednesday after the Federal Reserve announced its latest hike to interest rates but hinted the end to them may be near.
The S&P 500 was down 0.7% in late trading, and it drifted between modest gains and losses immediately after the Fed's announcement. The Dow Jones Industrial Average was down 249 points, or 0.7%, at 33,426, as of 3:42 p.m. Eastern time, while the Nasdaq composite was down 0.4%.
The move was widely expected, and it鈥檚 supposed to slow the economy further in hopes of getting inflation under control. The hope on Wall Street is that this is the final increase following the Fed's fastest flurry in decades. The central bank gave a nod toward the possibility in its , where it dropped a reference saying it "anticipates that some additional policy firming may be appropriate.鈥�
鈥淭hat's a meaningful change,鈥� Fed Chair Jerome Powell said.
But the Fed stopped short of declaring the end to rate hikes, which have already caused cracks in the U.S. banking system and sent stock prices well below their record heights. Powell also said that even though traders are hoping for cuts to rates later this year, which can act like steroids for markets, he doesn't expect them to happen this year.
The Fed's next meeting is next month.
Inflation remains well above the Fed's 2% target, and it's still hurting households trying to keep up. Lower-income households have been squeezed particularly hard. At the same time, high rates have also sharply raised hitting later this year because they act like a hitting the entire economy. Powell said he's still hopeful the economy can avoid a recession.
鈥淧eople did talk about pausing, but not so much at this meeting,鈥� Powell said about deliberations on interest rates at the Fed's meeting. 鈥淭here鈥檚 a sense that we鈥檙e much closer to the end of this than the beginning.鈥�
The banking system is feeling some of the fiercest pressure of high rates, and three of the four largest U.S. bank failures in history have come within the last two months. Investors have been hunting for other potential weak links, with the harshest scrutiny on small- and medium-sized banks that could see a sudden exodus of customers.
Shares of PacWest Bancorp, Western Alliance Bancorp and other rivals were steadier Wednesday, a day after seeing trading of their stocks get halted amid steep slides. PacWest was up 0.3%, and Western Alliance fell 3.2% after losing an earlier gain.
Eli Lilly was a big factor lifting the market, and it rose 7.1% after reporting encouraging results from a study of a treatment for Alzheimer鈥檚 disease.
Some of the market鈥檚 sharpest action was among companies reporting their results for the first three months of the year. Kraft Heinz rallied 2.5% after beating analysts鈥� forecasts for profit and revenue.
The majority of companies have been turning in better profits than feared so far. But expectations coming into this reporting season were low given the effects of much higher interest rates and a slowing economy. S&P 500 companies are still likely on the way to reporting a second straight quarter of profit drops.
That鈥檚 why much attention has been on what companies say about upcoming trends.
Advanced Micro Devices fell 9.2% despite reporting stronger profit and revenue than expected. It gave a forecast for revenue in the current quarter that fell short of some analysts鈥� expectations.
Oil prices were sliding amid worries about how much fuel a slowing global economy will burn. Benchmark U.S. crude oil fell 4.3% to $68.60 per barrel and is only a few dollars above its lowest point since late 2021.
Brent crude, the international standard, fell 4% to $72.33 per barrel. That sent energy stocks to the sharpest loss by far among the 11 sectors that make up the S&P 500. Devon Energy fell 2.8%, and Diamondback Energy dropped 4.1%.
Reports on Wednesday, though, offered some potentially encouraging data on the U.S. economy. Growth in U.S. services industries accelerated last month by a bit more than expected, according to the Institute for Supply Management.
A separate report also suggested the job market may be in better shape than expected. ADP said hiring among private employers accelerated much more last month than forecast. It could raise expectations for the federal government鈥檚 more comprehensive report on hiring, which will arrive Friday.
The job market has been one of the strongest pillars supporting the economy recently, though some mixed data recently has suggested it may be softening. On one hand, the Fed sees that as helpful in bringing inflation closer to its goal of 2%. On the other, though, a drop-off would sharply raise the risk of a recession.
In the bond market, the yield on the 10-year Treasury fell to 3.37% from 3.44% late Tuesday. It helps set rates for mortgages and other important loans.
The two-year yield, which moves more on expectations for the Fed, fell to 3.91% from 3.99%.
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AP Business Writers Elaine Kurtenbach and Matt Ott contributed.
Stan Choe, The Associated Press
