S&P 500 plunges as Fed considers shrinking its balance sheet

US stocks fell sharply on Wednesday, with the S&P 500 plunging 1.9 percent.

Elsewhere, markets were mixed. The STOXX Europe 600 rose 0.1 percent and the Nikkei 225 rose 0.1 percent. However, the Shanghai Composite fell 1.0 percent.

Investors in the US were spooked after the minutes of the last Federal Reserve monetary policy meeting released on Wednesday showed that the central bank has discussed reducing its balance sheet shortly after it raises rates later this year.

“If the Fed starts shrinking the balance sheet that’s going to be disastrous,” said Infrastructure Capital Management CEO Jay Hatfield.