The major indexes tumbled Tuesday as anxiety ramped up ahead of tomorrow's policy announcement from the Federal Reserve.
On Monday, stocks took in stride news of the latest bank failure thanks to a quick takeover of First Republic Bank by JPMorgan Chase (JPM(opens in new tab), -1.6%). But today, with the Fed on the cusp of another interest rate hike, investors fretted that more chaos could be in store for the beaten-down banking industry, which sent markets into a tailspin.
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The Federal Reserve is widely expected to announce a 25 basis point (0.25%) rate hike when it concludes its two-day policy meeting tomorrow. This will be the 10th straight rate hike the central bank has issued since March 2021, which will bring its terminal rate to a range of 5.00%-5.25% – its highest level since 2006.
With the First Republic failure still fresh on everyone's minds, David Nicholas, portfolio manager of XFUNDS(opens in new tab) and founder and CEO of investment and planning firm Nicholas Wealth Management(opens in new tab), believes more banks could be at risk if the Fed lifts rates higher from here.
Source : [Stock Market Today: Stocks Slide Ahead of Fed Announcement](www.kiplinger.com/investing/stocks/stock-market-today-stocks-slide-ahead-of-fed-announcement) by kiplinger@futurenet.com (Karee Venema) - Stocks Fed r