[New York Stock Exchange] Stocks Fall on 'First Rate Hike in Three Years'; NVIDIA Rises 0.7%

[Financial News]  

U.S. stocks closed lower for a third consecutive session on the 18th (local time).
The Federal Reserve System's (Fed) 'first rate hike in three years' weighed on investor sentiment.
However, big tech stocks generally held up well. NVIDIA rose 0.8%, while Apple gained 0.3%.
Meanwhile, bank stocks were hit hard by the shock of the rate hike.

The initial reaction was not negative after the Fed concluded its two-day Federal Open Market Committee (FOMC) meeting and raised the benchmark interest rate by 0.25 percentage points. Since the hike had already been anticipated, the three major indexes initially moved steadily higher.
However, the trend changed sharply after Chair Kevin Warsh focused on inflation concerns at his news conference and signaled the possibility of additional rate hikes.
The indexes turned lower across the board, and losses widened at times late in the session. The technology sector was not hit particularly hard, however, as the Nasdaq even rebounded near the close. This appears to be because the market had already received its 'rate-hike vaccine.'
Among the three major indexes, the Dow Jones Industrial Average posted the sharpest decline. The Dow fell 631.21 points, or 1.21%, from the previous session to close at 51,461.90.
The declines of 4.4% in International Business Machines (IBM), 4% in Goldman Sachs, and 3.7% in Boeing weighed heavily on the index.
The Standard & Poor's 500 Index (S&P 500) fell 33.92 points, or 0.45%, to 7,551.81, while the Nasdaq slipped 3.15 points, or 0.01%, to 25,978.43.
The Nasdaq-100, which comprises 100 large technology stocks, ended the session up 72.23 points, or 0.03%, at 28,945.06. Invesco QQQ ETF, which tracks the index, closed at $704.72, up $0.18, or 0.03%.
ProShares UltraPro QQQ (TQQQ), a leveraged ETF that tracks three times the daily movement of the Nasdaq-100, ended at $67.93, up $0.03, or 0.04%.

Semiconductor stocks were generally strong.
NVIDIA rose $1.73, or 0.82%, to $213.90. Intel, which was the subject of reports that it was discussing cooperation with SK hynix, surged $3.91, or 4.03%, to $101.05.
The Philadelphia Semiconductor Index (SOX) gained 70.56 points, or 0.63%, to 11,246.11. Direxion Daily Semiconductor Bull 3X Shares (SOXL), a leveraged ETF that tracks three times the daily movement of 30 semiconductor stocks, jumped $1.65, or 1.61%, to close at $103.97.
By contrast, memory-chip leader Micron Technology fell $1.05, or 0.11%, to $926.55, while NAND flash maker SanDisk dropped $10.93, or 0.71%, to close at $1,519.97.

Big tech stocks generally performed well.
Tesla rose $1.50, or 0.42%, to $358.08, while SpaceX surged $7.39, or 5.15%, to $150.88.
Palantir Technologies gained $1.78, or 1.03%, to $174.34, while Apple rose $1.07, or 0.32%, to $332.41.
Alphabet, however, fell $2.11, or 0.61%, to $342.87.

Large bank stocks recorded their worst day since February.
Goldman Sachs plunged $38.69, or 3.96%, to $937.98, while JPMorgan Chase fell $3.57, or 1.01%, to $348.92.
Bank of America declined $1.62, or 2.72%, to $57.90, while Wells Fargo plunged $2.67, or 2.98%, to $87.05.
Banks may be able to widen their net interest margins following a rate hike, but they could face weaker earnings because of higher loan-loss provisions resulting from an economic slowdown and reduced demand for loans.

[email protected] Song Kyung-jae Reporter