Stock Market Mixed as Fed Signals Delay in Interest Rate Cuts

The U.S. stock market experienced a mixed finish on Wednesday as investors awaited news on interest rates from the Federal Reserve. The S&P 500 fell after the Fed kept interest rates steady, disappointing hopes for immediate cuts. The Dow Jones Industrial Average rose slightly, while the Nasdaq composite saw a small decline.

Federal Reserve Chair Jerome Powell’s comments on inflation and interest rates caused fluctuations in the market. Powell acknowledged the high inflation levels but indicated that rate hikes are unlikely in the near future. The Fed also announced a slowdown in reducing its holdings of Treasurys to ease pressure on the financial system.

Traders had already adjusted their expectations for rate cuts this year due to persistent inflation. Companies like CVS Health, Starbucks, and Super Micro Computer reported weaker-than-expected results, leading to significant stock price declines. However, Amazon saw a rise in its stock price after reporting strong profits.

The market reacted to reports of a contracting manufacturing sector and fewer job openings, highlighting concerns about economic growth and inflation. Powell reassured investors that the current economic situation is not comparable to the stagflation of the 1970s and 80s.

Overall, the market remains cautious as it awaits further economic data and Fed decisions. The next few months will be crucial in determining the future path of interest rates and stock prices.