Global Stocks Sink After Fed Hike, Bonds Rally

Global equity markets gave up earlier gains and continued a weeklong sell-off on Wednesday after the U.S. Federal Reserve announced a fresh interest rate hike and said "some" further rate hikes would be necessary in the year ahead.The decision, announced at 2 p.m. Eastern time (1900 GMT), slashed more than 700 points off of the Dow Jones Industrial Average and sent MSCI's index of global stocks down nearly 0.9 percent for the day. The index is down nearly 13 percent since the start of December due to concerns that global economic growth is slowing."This is clearly a disappointment for those hoping for a dovish rate hike," said David Joy, chief market strategist at Ameriprise Financial in Boston. "It is a more moderate rate hike but it is a rate hike and there is still a gap between where the Fed is and where the market is in terms of policy expectations for next year."On Wall Street, the Dow Jones Industrial Average <.DJI> fell 351.98 points, or 1.49 percent, to 23,323.66, the S&P 500 <.SPX> lost 39.2 points, or 1.54 percent, to 2,506.96 and the Nasdaq Composite <.IXIC> dropped 147.08 points, or 2.17 percent, to 6,636.83.U.S. stocks are on pace https://tmsnrt.rs/2A3z5ML for their biggest December decline since 1931, the depths of the Great Depression.Fed Chair Jerome Powell's remarks added to the selling pressure in U.S. stocks when he said the pace of the balance sheet reduction is on a preset course and adjusting the pace of the balance sheet reduction is not an option at this time.The U.S. central bank's rate hike will likely dampen investor appetite for riskier assets throughout the globe, said Jorge Mariscal, emerging markets chief investment officer at UBS Global Wealth Management."People are worried about growth and to hear the Fed isn't (worried) concerns the market," he said. "In turn, that supports the U.S. dollar and that is negative news for emerging markets in general."