S&P 500 Edges Lower After Federal Reserve Holds Interest Rates Steady
U.S. stock markets finished mixed on Wednesday, with the S&P 500 closing slightly lower while the Nasdaq posted modest gains, as investor reaction remained subdued following the Federal Reserve’s widely expected decision to leave interest rates unchanged.
In its policy statement, the Federal Reserve cited still-elevated inflation alongside solid economic growth as justification for maintaining rates within the 3.5%–3.75% range. The central bank also noted that the U.S. labor market has “shown some signs of stabilization”, removing earlier language that had warned of rising downside risks to employment.
Markets had largely priced in a rate hold, with eight of ten policymakers voting to keep rates steady. Following the announcement, traders increased bets that the Fed could begin cutting interest rates in June, though expectations for earlier easing faded.
During his closely watched press conference, Fed Chair Jerome Powell avoided signaling future policy moves, emphasizing that decisions would remain data-dependent. Powell added that upside risks to inflation and downside risks to employment have diminished, reinforcing the Fed’s cautious and patient stance.
