MARKET SNAPSHOT

The Federal Reserve's decision to raise interest rates for the first time since 2023 sent stocks lower and Treasury yields higher. Oil prices eased back from their recent highs. Gold prices settled higher, but slipped after the Fed decision. The dollar strengthened.

MARKET WRAPS EQUITIES

U.S. stocks fell and Treasury yields hit more multiyear highs after the Federal Reserve raised rates for the first time in more than three years. Shares of technology companies steadied near the closing bell.

The Dow Jones Industrial Average dropped 1.2%. The S&P 500 fell 0.5% and the tech-heavy Nasdaq Composite edged down 0.01%.

The Federal Reserve hiked rates by a quarter-of-a-percentage point to a range between 3.75% and 4% on Wednesday, the first increase since 2023. At the press conference following the decision, Chairman Kevin Warsh refused to say how many more rate hikes might be required to bring inflation back to the Fed's 2% target.

Stocks and bonds were relatively stable before the press conference, but sold off while Warsh was at the podium.

"He's definitely not sending clear messages," said Allyson Heumann, professor of practice at Tulane University's Freeman School of Business.

"The bond market wants a plan," said Heumann, who was a bond trader before her academic career. "It wants to know where things are going, it wants to know what's going to happen in two years, what is our economy going to look like. He hasn't given any indication on what that's going to be, say, past 18 months. So the bond market is interpreting for itself."

Asian stocks gained as oil pulled back slightly from multimonth highs.

China's Shanghai Composite Index added 0.7% while the Shenzhen Composite Index gained 1.3%. The ChiNext Price Index climbed nearly 2%. Hong Kong's Hang Seng index edged up 0.2%.

South Korea's Kospi grew 1.4%, snapping a four-session losing streak.

Japan's Nikkei 225 rose 0.7%, led by energy and electronics stocks.

Stocks in Australia posted gains, as the S&P/ASX 200 rose 0.3%. New Zealand's S&P/NZX 50 Index added 1.0%.

COMMODITIES

Crude oil futures declined, retreating from the four-month highs reached on growing concerns about Middle East supplies as the conflict drags on with no solution in sight.

Brent crude oil settled down 2.7% at $105.83 a barrel, while West Texas Intermediate lost 3.2% to $102.43 a barrel.

"We are viewing this oil price pullback as corrective and still likely to be followed by fresh multi-year highs," oil trading advisory firm Ritterbusch & Associates said. Concerns regarding supply have increased as disruptions extend to the Red Sea and the Saudi pipeline outage, the firm added.

The U.S. Energy Information Administration reported a 640,000 barrel draw in U.S. commercial crude oil stocks for last week, which was smaller than expected, while gasoline and diesel inventories saw builds.

Overall inventories remain tight thanks to strong exports, said David Russell, global head of market strategy at TradeStation. "Today's numbers give some pause to the energy rally, but do little to ease bigger concerns about a supply crunch," he said.

Gold prices settled higher, ahead of the Fed's decision, but reversed course after.

Front month Comex gold for September delivery gained 1.27% to $4346.30 before slipping after the Fed announced it was raising interest rates.

TODAY'S TOP HEADLINES

Fed Delivers First Rate Hike in Years With Unanimous Vote

WASHINGTON-The Federal Reserve raised interest rates Wednesday for the first time in three years, a sharp reversal that began taking back cuts it made last year and implicitly undercut the White House's insistence that inflation isn't a concern.

The increase, approved unanimously, will raise the benchmark federal-funds rate range by a quarter point to between 3.75% and 4%. The vast majority of officials penciled in one more hike this year in interest-rate projections released after their meeting.

U.S. Retail Sales Rebound in Show of Consumer Strength

Sales growth at U.S. retailers rose in August, rebounding from its decrease in July, the Commerce Department said.

Retailers' sales rose by 1.2% last month to $773.9 billion, versus the 0.5% decrease recorded in July. The August reading was higher than the 0.8% increase economists polled by The Wall Street Journal expected.

Retail sales numbers are recorded in nominal terms and account for the total number of dollars spent. In August, Americans were still paying high prices for gasoline.

EU Chief Backs Canada's Push to Become Bloc's First Associate Member

The European Union's top official said she would work to make Canada the bloc's first associate member, a major shift indicative of the new ties traditional U.S. allies are forging with each other in the face of hostility from the Trump administration.

European Commission President Ursula von der Leyen said Europe needed to tighten its cooperation with like-minded democracies, in particular Canada, to retain the continent's sovereignty and tackle threats from what she called "an openly hostile world."

The landmark speech at the European Parliament in Strasbourg, France, signaled that the notoriously bureaucratic 27-member bloc, threatened by Russia to its east and an increasingly adversarial relationship with Washington, is rethinking its own limits. Officials are beginning to contemplate new, more flexible terms of inclusion, and Canada, whose prime minister has been urging Europe to create a space for a country heavily reliant on the U.S., will be the prototype.

Diesel Price Hits Record High. An Export Ban Is on the Table.

Record prices for diesel fuel are starting to hit Americans hard, and they're even weighing on stock prices.

The surge in diesel is hitting the profits of farmers and trucking companies, and causing severe sticker shock to consumers who use oil for heating. Trucking giant J.B. Hunt Transport Services said late Tuesday that soaring diesel and other costs would reduce third quarter profits by 5% to 10% from second quarter levels.

"We have seen some of the most radical and abnormal swings in fuel prices that we've ever seen," said CFO Brad Delco at an investment conference. Its shares were down 13% on Wednesday.

Amazon Boosts Minimum Pay for U.S. Full-Time Core Operations Staff to $20 /Hour

Amazon.com is raising the minimum starting wage for its U.S. full-time core operations employees to $20 an hour, a move that comes ahead of its major holiday hiring push.

The $1-per-hour increase applies to the e-commerce company's front-line workers, who handle tasks like sorting, packing and transporting orders. Amazon announced the move on Wednesday alongside new benefits like discounts on groceries through its online platforms and Whole Foods Market locations.

The pay increase and additional benefits come as Amazon is nearing the peak holiday shopping season, when the company embarks on a hiring spree to handle the surge in online orders that are about to pour through its network. Last year, Amazon planned to hire 250,000 full-time, part-time and seasonal workers in advance of the holidays.

Harold Hamm's Continental Resources Signs Preliminary Oil Deal in Venezuela

Billionaire oil baron Harold Hamm signed a tentative agreement Wednesday to venture into Venezuela to explore one of the Latin American country's undeveloped heavy-oil fields.

Hamm's Oklahoma-based Continental Resources is the latest to answer President Trump's call for U.S. companies to help revive Venezuela's dilapidated oil sector. Hamm is one of Trump's closest allies in the oil patch; he high-fived the president as votes rolled in on election night in 2024.

Hamm and Continental CEO Doug Lawler, who said he had traveled to Venezuela twice this year, signed a nonbinding memorandum of understanding with Venezuela's state-run Petróleos de Venezuela at the G-20 Energy Abundance Ministerial in Houston.

Expected Major Events for Thursday 00:30/SIN: Aug Merchandise Trade, incl non-oil domestic exports (NODX)

01:30/AUS: Aug Foreign Exchange Transactions and Holdings of Official Reserve Assets

08:00/TAI: Taiwan Monetary Policy Decision

08:30/HK: Aug Underemployment

08:30/HK: Aug Unemployment

08:30/HK: Jul External Merchandise Trade: Volume & Price Statistics

14:30/AUS: Jul Australia Conference Board Leading Index

21:00/SKA: Aug PPI

22:45/NZ: Aug Selected Price Index

22:45/NZ: Aug Overseas Merchandise Trade

23:30/JPN: Aug CPI (Nation), CPI ex-food (Nation)

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