Stocks fell sharply Tuesday, led by bank shares, as investors prepared for another possible interest-rate hike by the Federal Reserve.
The Dow Jones Industrial Average fell more than 500 points, or 1.5%, in trading shortly before noon. The tech-heavy Nasdaq and the S&P 500 also cratered.
The Fed will announce Wednesday whether it’s imposing its 10th rate hike since March 2022 to fight inflation. The Consumer Price Index rose 0.1% in March at an annual rate of 5%, well above the central bank’s target rate of 2%.
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Rising interest rates have created cash shortages at some banks as customers withdraw their money in search of better returns.
Regulators on Monday seized San Francisco-based First Republic Bank and struck a deal with JPMorgan Chase to take over most of its assets.
It was the second-largest bank failure in U.S. history.
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