On Wednesday, the Federal Reserve raised interest rates by half a percentage point and forecasted at least another 75 basis point increase in inflationary pressures by the end of 2023. This has heightened fears of a global recession and weighed heavily on risky assets. The Securities and Exchange Commission (SEC) of the United States has also voted to propose some of the most significant changes to the American equity market structure in nearly two decades.

Aiming to create more transparency, fairness, and competition in the market, they are mandating that retail stock orders be sent to auctions before being traded, establishing a new benchmark for brokers in getting the best client order executions and lowering trading increments and exchange access fees. If enacted, these would be the largest changes to stock trading regulations since 2005.

According to the Fed's most recent quarterly summary of economic projections, US central bankers expect the policy rate, which is currently in the 4.25%-to-4.5% range, to rise to 5.1% by the end of next year. Fed Chair Jerome Powell said after the statement that it was too soon to talk about cutting rates because the focus is on making the central bank's policy stance restrictive enough to push inflation down to its 2% target. The main board is down 0.6% after the announcement.

The aggressive interest rate increases implemented by major central banks around the world this year have raised concerns that the global economy will be pushed into recession, putting a premium on riskier assets such as equities. Each of Wall Street's three major averages is on track for its first annual decline since 2018 and its largest annual percentage decline since the 2008 financial crisis.