About this pageMarketWatch Live: Dow falls 700 points, but stocks off the lows in last half-hourLast Updated: Dec 15, 2022 at 3:36 pm ETFollow all the latest market movements on Thursday. 

Call it a delayed reaction, but the Federal Reserve’s signal that its main policy rate will likely peak above 5% and stay there for a while was getting the blame for Thursday’s painful stock-market rout.

The S&P 500 index was off 2.4%, heading for its worst daily drop in three months, with losses in its rate-sensitive communication services and information technology sectors leading the way lower.

The Fed’s dramatic pace of rate increases this year has been a tough medicine for many stock-market investors who hoped it wouldn’t be needed too much longer, with some recent easing on the inflation front.

“Hence, the selloff,” said Kent Engelke, chief economic strategist at Capitol Securities Management. “The Fed cannot lose this battle” on inflation, Engelke told MarketWatch. “Expectations dictate behavior.”

The Dow Jones Industrial Average was down 2.2% at last check, while the Nasdaq Composite Index was off 3.1%, according to FactSet.

Source : [Why are stocks getting hit hard Thursday? (It's taken a minute for the Federal Reserve's latest message to sink in.)](www.marketwatch.com/livecoverage/dow-futures-sink-over-250-points-over-fed-decision/card/why-are-stocks-getting-hit-hard-thursday-it-s-taken-a-minute-for-the-federal-reserve-s-latest-message-to-sink-in--w0pxyaIBEgC6b28A8SLe?mod=newsviewer_click) undefined - December 15, 2022