Federal Reserve raises rates for the fourth time in 2018

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Yet the level of bearishness in stock markets right now is excessive and risks becoming a self-fulfilling prophecy if the selling pressure persists.

Most thought the Fed would hit the pause button on any rate hikes for the remainder of 2018, with a slower clip of rate increases in the new year. The Dow ended down 352 points, or 1.5 percent, to 23,323.

The quarter-percentage-point boost in the Fed's benchmark interest rate was widely expected.

"Clearly the Fed is changing its tone and it's getting a little more dovish following the market reaction this week", said Adam Sarhan of 50 Park Investments.

-Bond prices were mixed. That's a substantial move for that benchmark lending rate. For the past three years rate futures traders have expressed skepticism the Fed would deliver as many rate hikes as promised. The unemployment rate is 3.7 percent, a 49-year low. Four of those increases have been under Powell. Powell's comments about continuing to shrink the Fed's $4 trillion balance sheet particularly spooked investors. "He had to say that the economic picture is not as good as three months ago, while also saying that the pillars of the economy remain intact". In general, shutdowns don't affect the USA economy or the market much unless they stretch out for several weeks, which would delay paychecks for federal employees.

Greene suggested that for Powell, the stock market might have been impossible to appease Wednesday.

Japanese stocks also declined after the Bank of Japan left ultralow rates unchanged, with the threat of trade protectionism and slowing global growth casting a pall over the export-driven economy.

USA markets are cooling after "years of outperformance" and working off "overvaluation in some areas" such as major tech companies, said Shane Oliver of AMP Capital in a report. But exactly where that point is depends on what the latest economic data may show.

Facebook lost 7.2 percent to $133.25. But a mix of factors - a global slowdown, a U.S.

There hasn't been one major shock that has sent stocks plunging. FedEx also said the U.S. Traders are fleeing to safety, according to reports, but with the looming crisis in Britain, the trade war between the U.S. and China and other problems in the Eurozone, there might not be anywhere to hide. The shipping company posted a smaller profit than analysts expected and said it will cut spending and offer buyouts to some workers to help make up for the shaky results. FedEx's shares, for example, plummeted over 12%, effectively pushing its stock down. It has dropped 35 percent this year.

The S&P 500 index skidded 39.54 points, or 1.6 percent, to 2,467.42.

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Markets have suffered wide losses over the last week.

The Nasdaq composite gave up 147.08 points, or 2.2 percent, to 6,636.83. The central bank said it was closely watching "global economic and financial market developments".

Smaller company stocks have been crushed during the recent market slump because slower growth in the US will have an outsize effect on their profits. "I've made my position very clear - any measure that funds the government must include border security", the president said at White House event.

The front-month USA crude contract dropped 1.8 per cent to $47.32 per barrel, while worldwide benchmark Brent crude futures were down 1.3 per cent at $56.50 per barrel. It dropped 7 percent Tuesday and closed at a 16-month low, and has fallen nearly 40 percent since October 3. Many economists are predicting that the United States could sink into a recession by 2020. Copper lost 0.8 percent to $2.67 a pound.

Energy company stocks fell again.

After early gains, bond prices headed lower.

The dollar stood at 112.50 yen, bouncing back from a seven-week low of 112.09 touched just before the Fed.

Materials sector recorded gains, with BHP rising 1%. The Fed's median estimate of potential GDP growth rose slightly to 1.9% from 1.8%. The Italian FTSE MIB jumped 1.6 percent.

Amongst other precious metals, palladium slipped 0.1 percent to $1,259.24 per ounce.

The major US indexes fell 7 percent this week and they've sunk more than 12 percent in December. Hong Kong's bucked the trend, ending the session 0.5 per cent higher at 25,753.

Silver fell 0.2 percent to $14.57 per ounce, while platinum declined 0.2 percent to $784.50 per ounce.