US stocks open lower as Fed kicks off key meeting

By Ovunc Kutlu

ANKARA (AA) – The US stocks opened lower on Tuesday as the Federal Reserve kicked off its key two-day meeting that could result in a larger interest rate rise at its end on Wednesday to tame high inflation.

The Dow plummeted 332 points, or 1.07%, to 30,687 at 9.49 a.m. EDT. The S&P 500 fell 44 points, or 1.14%, to 3,855.

The tech-heavy Nasdaq was down 109 points, or 0.95%, to 11,425.

The Fed could make a 100 basis points of interest rate rise at the end of its two-day meeting to put pressure on inflation that is hovering around its highest level in 40 years.

If realized, this would be the largest rate hike since February 1989.

The probability of the Fed raising rates 100 basis points climbed last week to as high as 34%, but it was down to 18% on Tuesday, according to the FedWatch Tool provided by US-based global markets company Chicago Mercantile Exchange Group.

Yet, the massive selloff in the US market continued after indices last Tuesday recorded their worst single-day losses in 2022 following the annual consumer inflation hitting 8.3% in August, above the estimate of an 8.1% annual increase.

The VIX volatility index, also known as the fear index, soared 5.3% to 27.13. The 10-year US Treasury yield jumped 2.6% to 3.581%.

The dollar index increased 0.4% to 110.17, near its highest level in 20 years, while the euro was down 0.47% to $0.9975 against the greenback.

Precious metals continued their decline, with gold falling 0.7% to $1,664, a fresh 52-week low. Silver dove 2.1% to $19.14.

Oil prices were down more than 1.4%. Global oil benchmark Brent crude was trading at $90.66 a barrel for a 1.46% loss. US benchmark West Texas Intermediate was around $83.83 – down 1.8%.