![Stock futures fall after the Fed's interest rate decision](https://image.cnbcfm.com/api/v1/image/106832018-1611875421401-gettyimages-1299156307-0v7a5757_2021012822041095.jpeg?v=1671103168&w=750&h=422&vtcrop=y)
Stock futures fell sharply on Thursday after the most recent Federal Reserve policy update.
Dow Jones Industrial Average futures fell 240 points, or 0.7%. S&P 500 futures fell 1% and Nasdaq 100 futures fell 1.3%.
Tesla shares fell more than 2% within the premarket after CEO Elon Musk sold some of his stake in the corporate.
On Tuesday, the Dow fell 142 points, while the S&P 500 fell 0.61% and the Nasdaq Composite fell 0.76%.
The key indices reacted negatively as investors digested recent comments from the Federal Reserve following a hike in its overnight lending rate. The central bank said it’s going to proceed to boost rates of interest until 2023 and anticipates a higher-than-expected final rate of 5.1%. Considering Wednesday’s half-percentage-point hike, the goal rate range is now 4.25% to 4.5%, the best in 15 years.
“The Fed just put a blockade on Santa’s sleigh,” said Sylvia Jablonski, CEO and chief investment officer of Defiance ETF.
She also noted the tone of Fed Chairman Jerome Powell, who made it “harsh” in a speech Wednesday afternoon and made it clear that “there is no such thing as a plan to pause or take a reverse path.”
“It should be higher for longer and monetary policy can be more restrictive than thought,” Jabłoński said. “The market can be handicapped by Fed policy for a while yet. While we just like the news and we prefer to see CPI printouts just like the last one which led to a short-term rally, this can lead to some short-term volatility. “
Despite favorable improvements akin to modest growth, spending and production, Powell expressed concern that job gains were too strong and the unemployment rate too high to fight inflation by the Fed.
On Thursday, investors will get one other portion of economic data to digest. Retail Sales, Recent Jobless Claims and the Philadelphia Fed Manufacturing Index can be posted at 8:30am EST.