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The Dow Jones Industrial Average fell over 2% on Wednesday as the Federal Reserve held interest rates steady.

The Dow Jones Industrial Average declined by 2.2% on Wednesday, marking its worst day of the year. The decline followed the Federal Reserve's decision to keep the benchmark interest rate in the 3.50%-3.75% range. While the administration announced the decision was expected, three members of the Federal Open Market Committee dissented, favoring a quarter-percentage-point hike. Market volatility was driven by rising oil prices following surprise attacks by Iran, and concerns over the sustainability of the artificial intelligence boom. Major tech companies, including Microsoft and Meta Platforms, reported quarterly results that mixed in their impact on AI-related stocks. Meanwhile, Kevin Warsh, the Fed chair, noted that AI spending is laying the groundwork for future growth. Historically, the Dow has shown resilience following such large drops, often rebounding within three months. Investors remain focused on whether the Fed will hike rates in September to combat persistent inflation.

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