Dollar Rallies, Stocks Decline on Fed Hike Bets: Markets Wrap – Bloomberg.com

The markets have been volatile in the wake of the Federal Reserve’s decision to raise interest rates. The dollar has rallied as investors bet on higher rates, while stocks have declined as the prospect of higher borrowing costs weighs on sentiment.

The U.S. dollar index, which measures the greenback against a basket of other major currencies, rose to a three-week high on Tuesday as investors bet on higher interest rates. The dollar’s gains were driven by expectations that the Fed will raise rates at least three times this year, as well as optimism over the U.S. economy.

Meanwhile, stocks have declined as investors weigh the potential impact of higher borrowing costs on corporate profits. The Dow Jones Industrial Average fell 0.5% on Tuesday, while the S&P 500 and Nasdaq Composite both dropped 0.3%.

The sell-off in stocks was broad-based, with all 11 sectors of the S&P 500 trading lower. Technology stocks were among the hardest hit, with the tech-heavy Nasdaq down 1.2%. The energy sector was also weak, with the sector down 1.4%.

The decline in stocks comes as investors remain cautious about the outlook for the economy. The Fed’s decision to raise rates has been seen as a sign that the central bank is confident in the strength of the U.S. economy, but there are still concerns about the impact of higher borrowing costs on corporate profits.

In addition, investors are also keeping an eye on the ongoing trade tensions between the U.S. and China. The two countries have been locked in a trade war for months, and the uncertainty has weighed on markets.

Overall, the markets have been volatile in the wake of the Fed’s decision to raise rates. The dollar has rallied as investors bet on higher borrowing costs, while stocks have declined as the prospect of higher borrowing costs weighs on sentiment.