Stocks slump after Fed keeps rates unchanged as oil prices climb.

Global stocks fell on Wednesday, extending declines after the Federal ⁠Reserve kept ⁠interest rates unchanged, while a rise in crude prices ⁠and an earlier reading on U.S. inflation kept equities under pressure.

The U.S. central bank’s summary of economic projections (SEP) showed the Fed’s benchmark ​overnight interest rate would fall by just a quarter of a percentage point by the end of this year, with no hint of the timing of such a move, while the inflation projection for the ‌end of the year was 2.7%, up from the 2.4% ‌view in December.

“Overall investors are kind of getting what they want. They got a patient Fed, acknowledging that tensions in the Middle East could complicate an already uncertain environment and they still project ⁠one interest rate cut ⁠this year despite inflation expectations going higher, at least based on the median projection,” said Anthony Saglimbene, chief market ​strategist at Ameriprise Financial in Troy, Michigan.

“But it really is about tensions in the Middle East, when is the Strait of Hormuz going to reopen and what’s the risk to Gulf State supply around oil. That’s really what the market’s focused in on.”

On Wall Street, U.S. stocks closed sharply lower, with each of the 11 major S&P sectors in negative territory, led by a 2.5% drop in the S&P 500 consumer staples index.

The ​Dow Jones Industrial Average fell 768.11 points, or 1.63%, to 46,225.15, the S&P 500 dropped 91.33 points, or 1.36%, to 6,624.76 and the Nasdaq Composite stumbled 327.11 points, ⁠or ⁠1.45%, to 22,152.42.

U.S. crude rose 0.11% to settle ⁠at $96.63 a barrel and Brent settled ​at $107.38 per barrel, up 3.83% after Iran’s huge Pars gas field was hit on Wednesday. It was the first reported strike on Iranian energy infrastructure in the ​Gulf during the U.S.-Israeli war on Iran, a major ⁠escalation that prompted Tehran to warn its neighbors to evacuate their energy installations.

Crude prices showed little reaction to the announcement by the Trump administration for a 60-day waiver of Jones Act shipping law in a bid to help ease deliveries of fuel and fertilizer to combat rising prices and supply disruptions.

Adding to inflationary concerns caused by spiking energy prices, the Labor Department said its Producer Price Index for final demand surged 0.7% last month, the most since last July, and well above the 0.3% rise forecast by economists polled by Reuters.

In the 12 months through February, the PPI increased 3.4%. That was ⁠the largest gain in a year and followed a 2.9% advance in January.

Other data from the Commerce Department showed factory orders rose 0.1%, which ⁠matched expectations, after an upwardly revised 0.4% drop in December.

MSCI’s gauge of stocks across the globe shed 9.05 points, or 0.89%, to 1,004.00 and was on track to snap a two-day run of gains, while the pan-European STOXX 600 index closed down 0.75%.

Investors are also awaiting more decisions from a host of other central banks this week including the European Central Bank, Bank of England and Swiss National Bank.

The Reserve Bank of Australia kicked things off on Tuesday by hiking interest rates for a second straight month, taking its benchmark rate to 4.1% and warning of a material inflation risk from the Iran war.

That was followed on Wednesday by the Bank of Canada, which kept its key policy rate on hold, as expected, but Governor Tiff Macklem warned it was ready to raise borrowing costs if higher energy prices risked turning into persistently elevated inflation.

The yield on benchmark U.S. 10-year notes jumped 6.3 basis points to 4.265% while the 2-year note yield, which typically moves in ⁠step with interest rate expectations for the Fed, rose 10.2 basis points to 3.773%.