Fed hikes rates; US stocks slide on September 17, 2026

1. FED HIKES RATES BY 25 BASIS POINTS
The Federal Reserve on September 17 raised the federal funds rate by 25 basis points to 3.75%-4.00%, its first increase since July 2023, in a unanimous vote. The 2026 dot plot shifted sharply higher and signaled one additional quarter-point increase this year. Fed Chair Kevin Warsh said inflation is too high and has been too long, but declined to give forward guidance. After the decision, President Donald Trump posted that US interest rates should be at 1% or lower and urged the Fed to cut quickly. US August retail sales rose 1.2% month-on-month, the strongest since March and above the 0.8% expected.

2. US STOCKS CLOSE LOWER
Dow Jones fell 631.21 points, or 1.21%, to 51,461.90, its lowest close since mid-June. The S&P 500 dropped 0.45% to 7,551.81 and the Nasdaq Composite slipped 0.01% to 25,978.42. Bank stocks came under pressure as the KBW index fell 2.88%, its biggest drop since February; Goldman Sachs lost 3.88%, Wells Fargo 2.98% and Bank of America 2.73%. Energy shares fell with oil: Occidental Petroleum dropped 6.53%, ExxonMobil 3.54% and Chevron 2.87%. On the upside, Intel rose 4.03% after some sources reported talks with SK Hynix on US chip production; SK Hynix said nothing has been decided. SpaceX gained more than 5% after Elon Musk again signaled a possible Tesla-SpaceX merger; Tesla rose 0.42%. Crypto-linked names fell: Circle dropped over 6%, Robinhood over 5% and Coinbase over 4%; Bitcoin traded around $75,729.93, down 0.22%, after the US Senate voted against advancing a crypto bill backed by Trump.

3. EUROPEAN STOCKS CLOSE HIGHER AHEAD OF FED
The pan-European STOXX 600 rose 0.46% to 637.09; Britain's FTSE 100 added 0.28% to 10,688.47, Germany's DAX gained 0.53% to 25,537.75 and France's CAC 40 rose 0.62% to 8,140.59. The MSCI global equities index fell 0.52%, a third straight session of losses. Asian futures on September 17 pointed lower for Australia, Hong Kong and South Korea, while Japanese futures showed a modest gain.

4. ASIAN MARKETS MIXED, TURKEY HIT CIRCUIT BREAKER
Hong Kong's Hang Seng closed up 0.19% at 24,713.78 and the Hang Seng Tech index rose 0.79%. Mainland China equities rebounded: Shanghai Composite +0.71%, Shenzhen Component +1.26%, ChiNext +1.96% and STAR 50 +4.14%, with turnover of 1.84 trillion yuan. South Korea's KOSPI rose 1.37% to 6,717.89, with SK Hynix up 4.08% and Samsung Electronics up 2.01%; India's Sensex rose 0.45%. By contrast, Turkey's BIST 100 index fell 6%, triggering a market-wide circuit breaker, and later widened losses beyond 7% amid fund-redemption pressure.

5. YIELDS AND DOLLAR RISE, OIL FALLS
The US 2-year Treasury yield rose 7.07 basis points to 4.734%; the 10-year yield traded back above 5%, around 5.02%. The US dollar index climbed 0.57% to 100.25, its biggest daily gain since June 17; the euro fell 0.64% to $1.147 and the yen weakened 0.47% to 155.99 per dollar. Brent crude settled down 2.69% at $105.83 a barrel; WTI fell about 3.2%-3.7% to around $101.9-$102.4 after reports that Saudi Arabia is seeking to restore about half of its East-West pipeline capacity within days following drone strikes. Spot gold fell about 0.7% to around $4,264 an ounce after spiking near $4,366 before the Fed decision; silver fell 1.05% to $63.01 an ounce.

6. OTHER NOTABLE HEADLINES
China and Japan both reduced US Treasury holdings in July, while the UK increased its holdings sharply. Apple is reportedly considering a return to the enterprise server market with M8 Ultra-based AI servers and has discussed using Nvidia interconnect technology. Novo Nordisk will partner with AI company Anthropic to use its Claude Science platform to accelerate drug discovery. United Airlines and American Airlines warned they may need to cut fourth-quarter capacity further if fuel prices stay elevated.

What to watch today: US weekly jobless claims on September 18 and Asian market reaction after the Fed decision.
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