The Dow is down nearly 200 points, with post-Fed gains showing that rate hikes are ahead of inflation

The Dow is down nearly 200 points, with post-Fed gains showing that rate hikes are ahead of inflation. U.S. stocks traded volatile on Wednesday after Federal Reserve Chair Jerome Powell suggested there was enough room for interest rate hikes before the central bank's economy was negatively impacted.

The Dow is down nearly 200 points, with post-Fed gains showing that rate hikes are ahead of inflation

The Dow Jones Industrial Average fell 280 points (0.8%). The average of good stocks has risen more than 500 points at some point. The S&P 500 is down 0.6%. The Nasdaq Composite Index fell 0.3%.

Powell said in a press conference that stocks fell from high and Treasury yields jumped after having a "significant place" to raise interest rates before hitting the labor market. "The risk of inflation is still rising," Powell said, so prices could rise.

The benchmark 10-year Treasury yield of 1.8% after Powell's remarks suggests that central banks may tighten their policies more aggressively, despite market volatility in January.

The post-January meeting of the Federal Reserve of the Policy Group suggested that the benchmark short-term lending rate could rise by a quarter of a point in March. That statement was expected, and stocks rose immediately after the announcement.

A statement from the Federal Open Market Committee said, "We expect this to be appropriate for raising the Fed Funds rate target soon, given that inflation is above 2% and the labor market is strong." The Federal Reserve Board will not meet in February.

But as Powell puts it, the market has begun to move and the pattern of market volatility has continued this week.

"After listening to Fed Chair Powell, it became clear that the risk of a rate hike was high and that previous Wall Street rallies were confusing," OANDA's Edward Moya said in a memo.

The Federal Reserve also said in a statement that it would begin shrinking its balance sheet after the rate hike. This is a more drastic step that many businessmen may have wanted the central bank to suspend immediately.

This is the third consecutive roller-coaster trading session for the market.

The Dow fell on Tuesday, but fell 818.98 points in the session and rose temporarily to 226.54 points. The move comes days after the Dow recovered from a 1,115-point deficit to record a slight increase on Monday.

The three main indicators in January are clearly negative. Nasdaq is in the correction zone, more than 17% from day highs and 13% below that month. The S&P 500 fell more than 8% earlier this year, to about 10% from its peak.

Meanwhile, investors have digested strong quarterly reports from Microsoft and other corporate earnings results.

Microsoft stocks rose more than 2% after the company released its expected quarterly earnings guidance. The report boosted key indicators and the technology sector early in the Fed's pre-update session.

"The conference call went well and lit up the market," said Scott Redler of T3Live. Whether stock prices will continue to rise "will tell us a lot about technology," he added.

On the downside, the Boeing 787 saw $ 3.5 billion in pre-tax costs for the Dreamliner program, although, for the first time since 2019, it has dropped more than 4% since aircraft manufacturers reported positive cash flow.