Fed signals rate hikes soon | Dow closes lower after wild trading | Balance sheet reductions ahead?

U.S. stocks on Wednesday saw a third straight session of wild trading.

VIEW IN BROWSER | SUBSCRIBE WED, JAN 26, 2022 EVENING BRIEF AS OF WED, JAN 26, 2022 • 05:04 ET DJIA 34168.09 -0.38% -129.64 S&P 500 4349.93 -0.15% -6.52 NASDAQ 13542.12 +0.02% +2.82   Most Active DOW NAME LAST CHG %CHG AAPL 159.69 -0.09 -0.06% MSFT 296.71 +8.22 +2.85% INTC 51.69 +0.69 +1.35% S&P 500 NAME LAST CHG %CHG T 24.25 -2.23 -8.42% F 19.91 -0.07 -0.35% AAPL 159.69 -0.09 -0.06% NASDAQ NAME LAST CHG %CHG AAPL 159.69 -0.09 -0.06% AMD 110.71 -0.42 -0.38% MSFT 296.71 +8.22 +2.85%   EDITOR'S NOTE U.S. stocks on Wednesday saw a third straight session of wild trading as the Federal Reserve gave an update on its plans to raise interest rates to address inflation.   The Dow Jones Industrial Average and the S&P 500 both finished the session lower after trading well into positive territory for most of the day, while the Nasdaq Composite eased off its highs to close little changed.   Stocks initially rose following the Fed's post-policy meeting announcement that the central bank was ready to increase its benchmark short-term borrowing rate by a quarter-percentage-point soon, which market participants expected.   The central bank also signaled in a separate statement that it would begin shrinking its balance sheet after hiking rates.   However, Fed Chair Jerome Powell in a subsequent press conference said there was "quite a bit of room" to raise interest rates without affecting the labor market. He added that prices could keep running higher as "inflation risks are still to the upside." The benchmark 10-year Treasury yield surged above 1.8% following the Fed announcements and Powell's comments. Stocks then rolled over from their highs.   "The stock market is especially vulnerable to higher rates and the removal of the tailwind that the Fed's asset purchases have provided for the past two years," said Chris Zaccarelli, chief investment officer for Independent Advisor Alliance. "We are concerned that the volatility we have already witnessed this month will increase in the months ahead." Hannah Miao | CNBC Associate Markets Reporter @HannahMiao_ Watch our live stream for all you need to know to invest smarter. TOP NEWS  Dow falls about 130 points in another day of wild swings as Fed signals rate hikes ahead to fight inflation Federal Reserve points to interest rate hike coming in March Supreme Court Justice Stephen Breyer to retire, giving Biden a chance to nominate a replacement A full recap of the Fed rate decision and the Powell remarks that knocked the stock market CDC director says 'milder doesn't mean mild' as Covid hospitalizations reach record high Microsoft shares up on strong cloud guidance U.S. calls for 'serious diplomatic path forward' as Russia adds troops near Ukraine Boeing posts third annual loss in a row as Dreamliner costs hit $5.5 billion This January market volatility making your head spin? Try these low vol, steady dividend payers David Einhorn predicts inflation will cause a recession, adds new positions   TOP VIDEO Shrinking the balance sheet is going to take some time, says Fed Chair Powell   CNBC PRO Goldman raises gold forecast, says get long as hedge against 'bad inflation'   SPECIAL REPORTS Tax-loss harvesting can help lower your tax bill: Here's what to know 'The Fed got the memo.' Here's what you can do to prepare for the coming rate hike   Unsubscribe Manage Newsletters Terms of Service Join the CNBC Panel Digital Products Feedback Privacy Policy   © 2022 CNBC LLC. All rights reserved. A property of NBCUniversal. 900 Sylvan Avenue, Englewood Cliffs, NJ 07632 Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes and Market Data and Analysis. Data also provided by THOMSON REUTERS