The S&P 500 held steady on Wednesday after the Federal Reserve left interest rates unchanged, offering little clarity on when borrowing costs might drop.
The Fed cited persistent inflation and solid economic growth as reasons for its decision. It noted that the job market has “shown some signs of stabilization” and removed language from its prior statement warning of increased employment risks.
Markets had widely expected the central bank to maintain rates at 3.5%–3.75%. After the announcement, traders increased bets on a rate cut in June, but not before then. Investors will be watching Fed Chair Jerome Powell’s remarks closely for hints on future policy. The meeting comes amid a Justice Department inquiry involving Powell and President Trump’s comments that a new Fed Chair may be named “soon.”
“The real action will be in the press conference, or if President Trump tries to steal their thunder by announcing his new chair pick and claiming he would have cut rates faster,” said Brian Jacobsen, chief economic strategist at Annex Wealth Management in Brookfield, Wisconsin.
At 2:15 p.m., the Dow Jones Industrial Average dropped 5.89 points, or 0.01%, to 48,997.52. The S&P 500 fell 6.45 points, or 0.09%, to 6,972.15, while the Nasdaq Composite rose 21.67 points, or 0.10%, to 23,839.66. The S&P briefly surpassed 7,000 points for the first time earlier in the session.
“Fed’s decision shows confidence in the economy. It won’t satisfy the White House, but they’re rarely satisfied,” said Tim Ghriskey, senior portfolio strategist at Ingalls & Snyder in New York.
Big Tech Earnings Kick Off
Investors are also focusing on a wave of Big Tech earnings after the market close. Meta, Microsoft, and Tesla will report first, starting the “Magnificent Seven” earnings that have fueled AI-related market gains. IBM is set to report later.
With high valuations driving interest in undervalued sectors, investors will watch these companies’ capital plans closely to see if AI investments will deliver strong returns.
On the NYSE, declining stocks outnumbered advancing ones 1.46-to-1, with 486 new highs and 80 new lows. On the Nasdaq, 1,753 stocks rose while 2,920 fell, a 1.67-to-1 ratio of decliners to advancers. The S&P 500 recorded 36 new 52-week highs and 10 new lows, while the Nasdaq Composite posted 95 new highs and 110 new lows.
