US stocks fell sharply Wednesday after the Federal Reserve raised its…

US stocks fell sharply Wednesday after the Federal Reserve raised its benchmark interest rate for the first time since 2023 and signaled at least one more hike this year. The Dow Jones Industrial Average dropped 631 points (1.21%) to close at 51,462, the S&P 500 fell 0.45% to 7,552, and the Nasdaq Composite slipped 0.01% to 25,978, all three had been trading higher earlier in the day before the announcement. The Fed raised the federal funds rate, the interest rate banks charge each other overnight that ripples through mortgages and loans, by a quarter point to a range of 3.75%-4%. Fed Chair Kevin Warsh said inflation has been "too high ... for too long" and signaled the central bank isn't done tightening. Bank stocks led the decline on fears that higher rates could slow lending: Goldman Sachs and American Express each fell almost 4%, while Bank of America and Wells Fargo dropped nearly 3%. Trucking company J.B. Hunt plunged more than 10% after warning that soaring diesel prices and driver-recruitment costs would cut its third-quarter earnings by 5%-10%. AI-infrastructure stocks bucked the trend: CoreWeave jumped more than 4%, snapping a five-day losing streak.

The Philippine Stock Exchange Index (PSEi) fell 1.51%, or 90.84 points, to close at 5,916.94 on Wednesday, dropping below the psychologically important 6,000 level for the first time this month. The decline came as investors grew worried about slower Philippine economic growth in the third quarter and continued to price in an expected US Federal Reserve rate hike, which was actually announced later that day, after Philippine trading hours had ended. Persistent peso weakness, the currency has repeatedly hit record lows this month, closing Tuesday at ₱62.835 per US dollar after touching an intraday record of ₱62.925, and elevated oil prices continued to weigh on the country's inflation and monetary-policy outlook. Trading stayed thin, with net value turnover of only ₱5.61 billion. Only conglomerate stocks held steady; services and industrial shares fell hardest, down 3.18% and 1.26% respectively. Among individual stocks, Semirara Mining and Power Corp, a coal producer, led the index's decliners, dropping 5.01%. The pressure builds on weeks of concern: the Bangko Sentral ng Pilipinas (BSP), the country's central bank, raised its benchmark interest rate to 5% in late August to fight inflation, which eased slightly to 6.1% in August but remains well above the BSP's 2%-4% target.

The Federal Reserve's rate decision landed after the Philippine market had already closed Wednesday, so its full impact on local assets will only show up once Manila trading resumes. The US central bank raised its benchmark rate by a quarter point to 3.75%-4%, its first hike since 2023, and signaled at least one more increase this year, a move Fed Chair Kevin Warsh said was needed because inflation has been "too high for too long." A higher US policy rate widens the gap with the Philippines' own 5% rate, which typically draws investment toward dollar assets and away from the peso, already hitting record lows for weeks and closing Tuesday within a few centavos of the closely watched ₱63 mark. That pressure compounds a shared root cause: a months-long Middle East conflict has pushed oil prices sharply higher, feeding the US inflation concerns that justified the rate hike, while directly raising import costs for the Philippines, which relies heavily on imported oil for transport and electricity. One offset for households: a weaker peso means every dollar sent home by overseas Filipino workers converts into more pesos, even as it makes imported goods and fuel pricier for everyone else.