Wall Street’s Worst Day Since April 2025: Did the Fed Just Lose the Market?
The Dow Jones Industrial Average sank 1,153 points, or 2.19%, on Wednesday. That marked its worst single-day drop since April 2025, coming after the Federal Reserve voted to hold interest rates steady.
Three of the twelve Federal Open Market Committee (FOMC) members dissented and wanted a rate hike instead. The S&P 500 and Nasdaq also closed sharply lower that day.
Bond Market Punishes the Fed's Rate Hold
The 10-year Treasury yield jumped 7 basis points and pushed past 4.67%. The 30-year yield climbed 10 basis points and topped 5.2%, its highest level since 2007.
That reaction suggests bond investors think Fed Chair Kevin Warsh is falling behind on inflation. He tried to project confidence at his press conference, but yields kept climbing anyway.
"I want to stress, of course, that decisions by this committee matter a great deal, and where necessary and appropriate, we will not hesitate to act."
- Kevin Warsh, Fed Chair
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