Wall Street slumps, erasing big Wednesday rally

Stocks declined as markets assessed the looming fallout from the Federal Reserve’s stepped-up fight against inflation.

On Wednesday, the Fed raised its benchmark interest rate by half a percentage point as part of an effort to slow consumer borrowing and tamp down inflation. The market rallied when Fed Chair Jerome Powell dismissed the possibility the Fed could resort to a more aggressive three-quarters point hike in the future.

Now, traders are starting to fret more about the impact of the Fed’s moves to dampen demand and slow the economy.

Technology companies had some of the biggest losses and weighed down the broader market, in a reversal from the solid gains they made a day earlier.