Dow Drops 500 Pts: Hawkish Dot Plot Pushes Yields Up

## US Stocks Close: Dow Drops ~500 Points, Tech Leads Declines At 4:00 AM Beijing time on June 18, US stocks fell Wednesday, with the Dow dropping about 500 points. Major tech weights led declines, and Treasury yields surged. Several Fed officials hinted at possible rate hikes this year to curb inflation, leaving investors uncertain about the monetary policy path. The Dow fell 507.12 points, or 0.98%, to 51,492.55, after hitting an intraday record earlier in the session, marking the third consecutive session of record highs; the Nasdaq fell 354.68 points, or 1.34%, to 26,021.65; the S&P 500 fell 91.25 points, or 1.21%, to 7,420. Major tech weights led declines, with Microsoft (379.4, +0.49, +0.13%), Meta Platforms, Alphabet, and Amazon (244.39, +6.89, +2.90%) all falling. Hot IPO stock SpaceX also weighed on sentiment, falling for the first time since its listing last Friday. Gains in chip stocks such as Intel (133.99, +12.89, +10.64%) and Micron (1133.99, +90.80, +8.70%) helped limit some of the broader decline. ## Warsh Chairs First Fed Meeting; Dot Plot Shows Hawkish Bias This was the first Fed meeting chaired by new Chair Kevin Warsh. After the two-day meeting, the Fed held the rate steady at a target range of 3.5% to 3.75%. According to the economic projections summary, several Fed officials expect a rate hike in 2026. The median year-end estimate for the federal funds rate is now 3.8%, up from 3.4% in the previous March forecast, suggesting the committee sees at least one rate hike needed in 2026. Warsh revealed he did not submit a rate projection, adding complexity to the outlook. Treasury yields jumped after the decision, with the two-year yield rising 16 basis points to 4.208%. "The market's initial reaction is mainly to the dot plot... it's much more hawkish," said Claudia Sahm, chief economist at New Century Advisors. "The inflation picture has changed a lot." Traders also focused on Warsh's repeated emphasis on the Fed's commitment to "price stability" during the press conference, implying he may not deliver rate cuts as many expected from Trump's nominee. Jeffrey Gundlach, CEO of DoubleLine Capital, said: "He's absolutely telling you he plans to achieve price stability. That means... we won't see the loose monetary policy some expected from Chair Warsh. He didn't sound like that at all today." ## Related Topics - Topic: Short-term market fluctuations, but medium- to long-term upward trend unchanged