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Stocks Slump as Investors Ask When Rate Hike Will Happen

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NEW YORK (TheStreet) -- Stocks extended session lows by mid-afternoon Friday as investors fretted over when the Federal Reserve will raise rates after keeping them unchanged at their September meeting.

The S&P 500 was down 1.4%, the Dow Jones Industrial Average fell 1.6%, and the Nasdaq slid 1.2%.

The central bank left the Fed funds rate near zero, a level it has held for almost a decade, citing "global economic and financial developments." The Fed was likely influenced by recent market volatility tied to China's slowdown. Fed members voted to keep the Fed funds rate between zero and 0.25% in a nine-to-one vote.

Market observers think the Fed has made stocks even more volatile because of continued uncertainty over a Fed rate hike. The Fed's dot plot forecast showed that Fed members expect interest rates to close out the year at 0.40%, meaning a hike in October or December is probable. A majority of Fed members expect to raise rates this year, Fed Chair Janet Yellen said in a press conference.

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