U.S. stocks dropped Wednesday after the Federal Reserve raised its inflation expectations and moved up the time frame on when it will next hike interest rates.

The S&P 500 dipped 0.5% to 4,223.70, dragged down by utilities and consumer staples. The broad equity benchmark dropped as much as 1% in volatile trading as all 11 sectors fell into the red at one point. 

The policymaking Federal Open Market Committee indicated that rate hikes could come as soon as 2023, after signaling in March that it saw no increases until beyond that year.

The Fed also raised its headline inflation expectation to 3.4% for 2021, a full percentage point higher than the March projection, but the post-meeting statement continued to say that inflation pressures are “transitory.”
 

Plan A : Short if market failed to support above 4199. Targets are 4173, 4145 and 4118.

Plan B : Long if market supported firm above 4199. Targets are 4214, 4231 and 4249.

Stock futures fell in early morning trading on Thursday after the Federal Reserve raised inflation expectations and forecast rate hikes as early as 2023.

The Nasdaq Composite dipped 0.2% to 14,039.68 after retreating 1.2% at its session low.

Markets rallied off their intraday lows after Fed Chair Jerome Powell said projections for future rate increases should be “taken with a big grain of salt” and reiterated that he believes that inflation is transitory.

Powell also did not issue guidance on when the central bank will begin tapering its bond-buying program.

Also on Wednesday China announced it will release industrial metals from its natural reserves to keep commodity prices in check.
 

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Plan A : Short if market failed to support above 13871. Targets are 13829, 13789 and 13744.

Plan B : Long if market supported firm above 13871. Targets are 13902, 13935 and 13968.