In a rollercoaster session on Wednesday, US stocks closed with mixed results as the Federal Reserve opted to keep interest rates unchanged during its July meeting. Investors are weighing robust growth data against concerns over future inflation and policy direction.
Market Movers: Dow Down, Nasdaq Up
The Dow Jones Industrial Average fell 171.71 points (0.38%) to finish at 44,461.28, while the S&P 500 edged down 7.96 points (0.12%) to 6,362.90. In contrast, the Nasdaq Composite climbed 31.38 points (0.15%) to 21,129.67, fueled by gains in chipmakers and tech giants.
Sector Snapshot
- Materials and real estate led declines, dropping 1.99% and 1.43% respectively.
- Utilities and technology were bright spots, rising 0.69% and 0.43% as investors sought defensive plays and high-growth names.
Fed’s Rate Decision: A Pause, Not a Pivot
In a 9-2 vote, the Federal Open Market Committee (FOMC) chose to hold the federal funds rate at 4.25%–4.5%. Fed Chair Jerome Powell emphasized patience, noting the need to assess how tariff policy and global trends impact inflation.
However, dissent from Vice Chair for Supervision Michelle Bowman and Governor Christopher Waller marked the first time since 1993 that multiple governors voted against a policy decision. Both argued for cuts, citing cooling labor markets and tame price pressures.
Growth Beats Expectations
Adding fuel to the debate, new Commerce Department data showed the US economy expanded at a 3% annualized rate in Q2—outpacing the 2.3% forecast. The stronger growth raises questions about the timing of any future rate cuts.
Tech Watch
Among major tech names, Apple, Tesla, Amazon, and Meta saw modest pullbacks, while Nvidia and Broadcom led gains with about 2% each. Microsoft and Alphabet also posted slight advances as earnings season approaches.
Looking Ahead
With the Fed in wait-and-see mode and election season on the horizon, markets are bracing for volatility. Traders will be watching inflation reports, tariff talks, and corporate earnings for clues on the next policy move.
Reference(s):
cgtn.com
