Finance

U.S. stock markets closed sharply lower as investors reacted to the Fed's revised interest rate projections. The S&P 500 and Nasdaq Composite both fell over 1%, while the Dow Jones Industrial Average dropped 507 points, erasing early gains that had initially pushed it to record intraday levels.

Short-dated U.S. Treasury yields jumped after the Fed's policy statement, with the 2-year note reaching its highest level since February 2025. Traders have now fully priced in the likelihood of higher borrowing costs by October, reflecting the central bank's more aggressive stance against rising energy-driven inflation.

Bitcoin fell below $65,000 as digital assets faced pressure from a strengthening dollar and the Fed's hawkish guidance. Simultaneously, the SEC is reportedly preparing a new 'innovation exemption' policy that would allow crypto firms to offer blockchain-based versions of traditional U.S. stocks, potentially enabling 24/7 equity trading.