U.S. stocks fall after Fed signals one possible rate hike in 2026

U.S. stocks declined after Federal Reserve officials signaled they still expect one interest-rate hike this year, even as the FOMC kept the policy rate unchanged at 3.5%-3.75%. The median “dot plot” projection now points to a 3.8% year-end rate, up 0.4 percentage points from March, according to CNBC. The 2-year Treasury yield jumped 15 basis points to 4.205% as the S&P 500 fell 1.21%, the Nasdaq dropped 1.34%, and the Dow slid 0.97%. May inflation data showed CPI rose 4.2% year over year and core CPI increased 2.9%, both in line with expectations.