Volatility In Markets Drops Further After Fed Raises Interest Rate By 0.5%

US stocks closed lower on Wednesday, after the Federal Reserve announced its rate decision.

The Federal Reserve raised its target fed funds rate by 0.5% to a new range of between 4.25% and 4.5%, in light with expectations from Wall Street. However, the central bank also expected rate increases through next year with no cuts until 2024.

Shares of Charter Communications, Inc. (NASDAQ: CHTR) dropped more than 16% on Wednesday after the company presented at its Tuesday investor event and outlined a plan to spend $5.5 billion on its network to introduce higher-speed broadband connections.

Majority of the sectors on the S&P 500 closed on a negative note, with financials and materials stocks recording the biggest plunge on Wednesday. However, health care stocks traded slightly higher during the session.

The Nasdaq 100 dropped 0.79% to close at 11,740.92 on Wednesday, amid gains in shares of Apple Inc (NASDAQ: AAPL) and Tesla Inc TSLA. The S&P 500 fell 0.61%, while the Dow Jones lost 0.42% to 33,966.35 in the previous session.

The Chicago Board Options Exchange's CBOE Volatility Index (VIX) dipped 6.3% to 21.14 points on Wednesday.

What is CBOE Volatility Index?

The CBOE Volatility Index, popularly known as VIX, is a measure of the equity market's expectation of volatility based on S&P 500 index call and put options.