S & P 500 fell on Wednesday after the federal reserves lowered its reference interest rate, but the President of the Fed Jerome Powell signaled that the move was not to sign that the central bank necessarily moves in a long cycling interest rates.
The S & P 500 dropped by 0.5%, while Nasdaq Composite fell by 0.9%. The Dow Jones Industrial Average mostly stagnated after previously reaching a record level. The investors seem to have achieved profit on technological shares after a widely expected decision, which also affected shares.
The Federal Open Market Committee has lowered its reference interest rate for overnight per cent percentage point in the ratio of votes 11 to 1, placing an interest rate for overnight ranges between 4% and 4.25%. The central bank also signaled that two reductions in interest rates will be carried out during the rest of the year.
The Fed emphasized the recent sluggish in the labor market in his statement.
“The growth of jobs has slowed down, and the unemployment rate has grown slightly, but the Committee remains in its statement after the meeting, which also states that the economic activity has” mitigated “, and inflation” increased to some extent. “
However, possible disappointing for traders was Powell’s comment at his press conference after the decision, where the move was characterized as a “risk management”. Powell’s comments suggest that this move was more to reduce insurance in the event that the economy is dramatically slow.
Moreover, the Central Bank gave sharper interest rates in 2026, where officials envisage only another reduction in interest rates in the new year, slower than current market prices from two to three. Certainly, the so-called dot chart Feda shows a large deviation of opinions for the next year.
“Net, Net, FED officials did not press the panic button as they decided to reduce interest rates for the smallest possible size in the September meeting,” said Christopher S. Rupkey, the main economist in Fwdbonds.
“One reduction rate per appointment shows that no more inflation is based on the customs in a serious threat and that the deceleration of economic growth with the companies that employ less new employees are increasing, and the labor market concerns were transferred to the first plan.”
The stocks of high-speed technological shares were led by the losses after the FED decision, and NVIDIA, Oracle, Palantir and Broadcom fell everything, transmits SEEbiz.
From the positive side, shares that would benefit from lower interest rates were in green. Walmarta shares, JPMorgan and American Express were more, lifting the Dow.
