US Stocks Drop Sharply, Market Volatility Increases

U.S. stocks dropped from near two-week highs on Wednesday following the Fed’s policy decision.

The Federal Reserve increased interest rates by a quarter of a percentage point to 4.75%-5% at its March FOMC meeting. During the press conference, Fed Chair Jerome Powell said the FOMC considered a pause at this meeting but the hike was supported by a strong consensus.

All the major sectors on the S&P 500 closed on a negative note, with real estate and financials stocks recording the biggest losses on Wednesday.

The Nasdaq 100 dropped 1.37% to close at 12,567.15 on Wednesday, amid losses in shares of Tesla Inc TSLA and Amazon.com, Inc. AMZN.

The S&P 500 fell 1.65%, while the Dow Jones lost 1.63% to 32,030.11 in the previous session.

The Chicago Board Options Exchange's CBOE Volatility Index (VIX) increased 4.1% to 22.26 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.

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