US stocks sink on worries about a possible hike to interest rates this year by the Federal Reserve (opens in new tab)

U.S. stocks slumped Wednesday on speculation the Federal Reserve may hike interest rates this year to keep a lid on inflation. The S&P 500 dropped 1.2% and erased an earlier, modest gain after the Fed released projections showing that nine of 18 policymakers foresee at least one increase to its main interest rate this year. One important policymaker at the Fed did not give a forecast for where the federal funds rate may end 2026: Chairman Kevin Warsh.