The Federal Reserve raised interest rates Wednesday for the first time since 2023, lifting its benchmark a quarter point to 3.75%-4%.
The vote was unanimous, 12-0, and 16 of the 18 policymakers who submitted forecasts penciled in at least one more increase this year.
Inflation is running at 3.4%, unchanged from July but well above the Fed's 2% target. The U.S. Central Bank now sees a return to the objective no earlier than 2029.
Officials revised their forecasts for inflation and growth higher, and unemployment lower.
Fed Chair Kevin Warsh said the central bank had removed "a dose of accommodation."
Asked what message he had for President Donald Trump, who has spent months demanding cuts, Warsh said he had "nothing for you."
The Fed's next meeting is in late October, days before the midterm elections.
The Bond Market Had Already Moved
The 10-year Treasury yield touched 5.04% ahead of the decision, its highest level since 2007, as investors weighed whether the Fed could contain price pressures with oil above $100 a barrel.
The iShares 7-10 Year Treasury Bond ETF (NASDAQ: IEF) closed the third straight week of losses, reaching November 2023 lows.
The move was not confined to the 10-year maturity.
The 2-year yield climbed to 4.75% and the 30-year to 5.34%, leaving the curve repriced for a central bank that has stopped easing and started tightening.
Chart: 10-Year Treasury Close The Week At 5% Yield, Highest Since 2007
Fuel Was The Week's Real Disruption
Diesel set fresh records, with the average topping $6.30 a gallon, after a drone strike damaged pumping stations on Saudi Arabia's East-West pipeline, the line carrying crude to the Red Sea.
Those costs are already reaching earnings.
J.B. Hunt Transport Services Inc. (NASDAQ: JBHT), one of the largest U.S. trucking and intermodal carriers, warned Wednesday that third-quarter profit would fall 5% to 10%, citing $25 million in added driver expenses and more than $10 million from fuel.
Chief Financial Officer Brad Delco described "some of the most radical and abnormal swings" in fuel prices the company has experienced.
The stock dropped sharply on the warning and finished the week down 13.2%, the worst performer in the S&P 500. Schneider National Inc. (NYSE: SNDR), Old Dominion Freight Line Inc. (NASDAQ: ODFL), Knight-Swift Transportation Holdings Inc. (NYSE: KNX), XPO Inc. (NYSE: XPO) and Landstar System Inc. (NASDAQ: LSTR) fell with it.
Detroit's automakers logged a second straight losing week.
General Motors Co. (NYSE: GM) fell about 4%, Ford Motor Co. (NYSE: F) roughly 5%.
Cybersecurity Led The Winners
The week's best S&P 500 performer came from an unrelated argument about artificial intelligence.
CrowdStrike Holdings Inc. (NASDAQ: CRWD) rose 16.1%, the top gainer in the index, after Anthropic Chief Executive Dario Amodei used a weekend post to call on the AI industry to slow the pace of development.
Investors read the debate as a durable bid for security spending rather than a threat to it, and the stock touched a record $247.20 on Friday.
Stephens lifted its price target to $280 and Bank of America to $260.
Major Players Followed
Palo Alto Networks Inc. (NASDAQ: PANW) gained 9.7% and Fortinet Inc. (NASDAQ: FTNT) 8.5%.
Revvity Inc. (NYSE: RVTY) climbed 14.9%, the second-best in the index, on analyst upgrades and deal flow.
KeyBanc raised its target to $165 with an Overweight rating after stronger second-quarter demand trends, and a bolt-on acquisition of France-based Human Cell Design pushes the life sciences company deeper into diabetes, obesity and GLP-1 metabolic research.
The shares hit January 2023 highs.
Coinbase Global Inc. (NASDAQ: COIN) advanced 10.9% as Bitcoin (CRYPTO: BTC) cleared $80,000, capping the token's strongest week in years, after the Securities and Exchange Commission granted an innovation exemption enabling trading in tokenized stocks.
Strategy Inc. (NASDAQ: MSTR), Robinhood Markets Inc. (NASDAQ: HOOD) and Bullish (NYSE: BLSH) all rallied alongside it.
Generac Holdings Inc. (NYSE: GNRC) rose 9.8% on the week's biggest corporate headline of the week.
The generator maker signed a long-term agreement to supply backup power for Amazon.com Inc. (NASDAQ: AMZN) data centers, an arrangement Generac valued at up to $8 billion over its life, with $2.4 billion of deliveries expected across 2027 and 2028.
Amazon's investment arm received a warrant for up to 1.7 million Generac shares, nearly 3% of the company, at $201 each. Cantor Fitzgerald reiterated Overweight with a $333 target.
FactSet Research Systems Inc. (NYSE: FDS) rounded out the leaders, up 9.4%.
And The Losers Beyond Trucking
Charter Communications Inc. (NASDAQ: CHTR) fell 11.4% after Wolfe Research cut the stock to Underperform from Peer Perform with a $118 price target, arguing broadband industry dynamics "look worse."
The shares are down roughly 49% over the past year.
Corning Inc. (NYSE: GLW) dropped 10.1% after launching an at-the-market equity offering of up to $2 billion through Goldman Sachs Group Inc. (NYSE: GS), raising concerns about dilution.
The specialty glass and optical fiber maker had entered the week up roughly 91% for the year on AI infrastructure demand, hyperscaler agreements and Nvidia Corp. (NASDAQ: NVDA)-backed capacity expansion.
