U.S. Markets React as December Rate Fate Remains Fluid
(MENAFN) U.S. equity markets closed with divergent results Wednesday following Federal Reserve Chair Jerome Powell's indication that the central bank could skip additional interest rate reductions before year-end.
The Dow Jones Industrial Average shed 74.37 points, declining 0.16 percent to settle at 47,632.00. The S&P 500 slipped a marginal 0.30 points, effectively flat at 6,890.59, while the Nasdaq Composite Index surged 130.98 points, climbing 0.55 percent to 23,958.47.
Market breadth tilted negative across the S&P 500, with seven of eleven primary sectors finishing in the red. Real estate suffered the steepest losses, plunging 2.66 percent, while consumer staples retreated 2.00 percent. Technology and communication services bucked the trend, gaining 1.05 percent and 1.04 percent, respectively.
The Fed trimmed its benchmark overnight lending rate by 25 basis points to a 3.75-4.00 percent target range Wednesday, concluding its two-day policy meeting with the year's second rate cut. Market participants had broadly anticipated another December reduction prior to the announcement.
Powell deflated those expectations, stating "a further reduction in the policy rate at the December meeting is not a foregone conclusion."
Michael Rosen, chief investment officer at Angeles Investments, said "Powell is reflecting the tension on the Fed between those who favor more aggressive easing and those who are concerned that inflation remains too high, even as the labor market weakens."
Market attention now shifts to quarterly results from Big Tech's "Magnificent Seven" cohort. Alphabet, Meta Platforms, and Microsoft are set to release earnings later Wednesday, with Apple and Amazon reporting Thursday.
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