NEW YORK (Reuters) - U.S. stocks mostly fell while the dollar cut its losses on Wednesday after the Federal Reserve delivered a widely expected U.S. interest rate hike.
A slide in technology stocks weighed on the Nasdaq and S&P 500 as investors worried about the pace of economic growth after the rate increase and weaker-than-expected inflation data.The U.S. central bank lifted the benchmark lending rate by a quarter percentage point, its second quarter-point hike this year, and said it would begin cutting its huge holdings of bonds and securities this year. Fed policy makers also signaled they were likely to raise rates once more this year.That helped to lift yields on U.S. two-year notes from their lows of the day. Long-dated Treasury yields though tumbled to their lowest since early November, thanks to the weak inflation and other economic data."It just looks like the Fed is sticking to their story and the market remains highly skeptical that the Fed is going to be able to deliver just based upon underlying data. I would think that at some point the market is going to be pricing in even greater risks that the Fed might be moving too quickly," said Mark Cabana, head of U.S. short rates strategy at Bank of America Merrill Lynch in New York.The U.S. yield curve flattened, with the difference between short-dated two-year Treasury yields and benchmark 10-year yields narrowing to a difference of 78.58 basis points