U.S. stocks finished with a mixed performance Wednesday after the Federal Reserve announced a widely anticipated cut to its benchmark interest rate.
The Dow Jones Industrial Average climbed 260 points, or 0.57%. However, the broader S&P 500 edged down 0.1%, and the tech-focused Nasdaq Composite declined 0.33%. While markets had rallied in recent weeks in anticipation of the move, the announcement itself failed to spark a significant advance.
The S&P 500’s slight loss came despite gains in approximately 460 of its component companies. The index was weighed down by significant drops in technology giants like Nvidia (NVDA) and Broadcom (AVGO), which fell 2.67% and 3.84%, respectively.
In a press conference, Federal Reserve Chair Jerome Powell characterized the move as a “risk-management cut,” pointing to a changing economic landscape. “What’s different now is that you see a very different picture of the risks to the labor market,” Powell said.
David Kelly, chief global strategist at JPMorgan Asset Management, told CNN the Fed acted in response to a weakening labor market but will remain cautious due to persistent inflation. “They thought it was appropriate to cut rates, but they’re not going to cut rates fast, because they recognize that there is also an inflation problem out there,” Kelly explained.
He added that the near-unanimous policy decision reinforces the central bank’s image as a balanced and independent institution, which helps build confidence among global investors.
Other markets also reacted to the Fed’s cautious tone. After an initial drop, the U.S. dollar index reversed course during Powell’s press conference to gain 0.3%. Similarly, Treasury yields dipped before rising as the Fed chair continued to highlight ongoing inflation risks.
Source link
