NEW YORK (AP) – U.S. stocks are slumping Thursday morning as Wall Street continues to swirl after the Federal Reserve said it will keep interest rates at nearly zero for years to help nurse the wheezing economy.
The S&P 500 was 1.4% lower in morning trading. It follows up on a volatile day, where the index at first rose following the Fed’s announcement before giving out in the last hour of trading to drop to its first loss in four days.
The Dow Jones Industrial Average fell 313 points, or 1.1%, to 27,719, as of 9:42 a.m. Eastern time, and the Nasdaq composite was down 1.9%. The selling was widespread, and roughly 95% of the stocks in the S&P 500 were lower.
Low interest rates are usually a boon for investors, sending stocks soaring, and analysts gave varying possible reasons for the market’s weakness. Among them: the gloomy outlook Fed Chair Jerome Powell gave for the economy’s prospects and built-up expectations in some corners that the Fed would be even more generous with its stimulus. This also isn’t the first hangover stocks have had following a rate announcement by the Fed.
Markets “hoped for the Fed to put policy money where the mouth is” but “ended up a tad disappointed,” Mizuho Bank said in a report. The Fed was “long on talk and short on action.”