BEIJING — Asian stock markets tumbled by unusually wide margins Thursday after the Federal Reserve indicated it plans to start raising interest rates soon to cool inflation.
Wall Street’s benchmark S&P 500 index lost 0.1% on Wednesday after a Fed statement said the U.S. central bank “expects it will soon be appropriate” to raise rates. Investors expect as many as four rate hikes this year, starting in March. The Fed also said monthly bond purchases that push down long-term rates by injecting money into the financial system would be phased out in March.
The Dow Jones Industrial Average DJIA, -0.38% fell 0.4% to 34,168.09. The Nasdaq composite COMP, +0.02% was little-changed at 13,542.12, shedding a 3.4% gain earlier in the day. The last time the Fed raised rates and shrank its balance sheet at the same time was in late 2018. The S&P 500 lost nearly 20%.
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