U.S. equities fell sharply Wednesday, with the Dow Jones Industrial Average dropping 700 points to its lowest level of 2026, as investors reacted to new economic data and comments from Federal Reserve Chair Jerome Powell raising concerns over persistent inflation.
Other major U.S. indices also retreated: the S&P 500 fell 1.2%, while the Nasdaq Composite declined 1.3%.
The Federal Reserve maintained the benchmark federal funds rate at 3.5%–3.75%, citing ongoing uncertainty regarding the economic impact of developments in the Middle East. Powell noted in a press conference that while some progress has been made in curbing inflation, it remains below desired levels.
Despite holding rates steady, the Fed reiterated its expectation for at least one rate cut later this year, signaling cautious optimism about moderating inflation pressures.
Analysts said the sharp sell-off reflects heightened investor sensitivity to geopolitical risks and inflation data, underscoring ongoing volatility in U.S. equity markets as the economy adjusts to both domestic and international uncertainties.
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