S&P notches record close after Fed leaves December rate hike on the table

The S&P 500 hovered near a record high and bank stocks surged after the Federal Reserve indicated another rate hike this year was possible and that it would begin the unwinding of its balance sheet next month.

The statement was a little more hawkish than traders anticipated, causing the 10-year Treasury yield to jump higher and in turn, boosting financial shares.

The Dow Jones industrial average was down 1 point with 3M and Apple contributing the most to the losses. Earlier, the Dow ticked above 22,386.01 to trade at a new record high.

The S&P 500 fell 0.12 percent, with utilities and consumer staples contributing the most to the losses. Earlier, the S&P 500 hit a new intraday record of 2508.85; industrials and materials shares both hit intraday all-time highs in today's session.

Following the Fed's announcement, shares of major banks including PNC Financial Services, Bank of America and Citi were all up more than 1 percent.

The Nasdaq composite fell 0.29 percent with Apple, Microsoft and Amazon all lower.

U.S. central bank announced it will begin in October rolling off its $4.5 trillion balance sheet, most of which consists of the Treasurys and mortgage-backed securities it acquired under a program known as quantitative easing.

At the same time, the Fed did not raise its benchmark interest rate from its current 1 percent to 1.25 percent target, however, its updated rate forecast show that another hike this year is likely.

Source: Bloomberg Pro Terminal

Jr Trader Alexander Kumanov

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