U.S. Stocks Slip After Federal Reserve Rate Cut

U.S. stocks experienced modest losses following the Federal Reserve's decision to cut interest rates by 50 basis points. Despite a brief rise in the S&P 500 post-announcement, the index closed lower. The rate cut aims to control inflation and support the labor market. Trading remained volatile throughout the day.

U.S. stocks closed with modest losses on Wednesday, falling short of their intraday highs, after the Federal Reserve reduced interest rates by 50 basis points. This marks the first cut in over four years and was on the higher end of market expectations.

Trading exhibited choppy behavior as the S&P 500 moved between gains and losses prior to the announcement. The index rose briefly by 1% following the news but eventually pared back gains to finish lower. The Fed emphasized its "greater confidence" in moving inflation towards its 2% target and cut rates by half a percentage point to maintain a healthy labor market.

"The Fed ended the pause with a bang. It's a strong signal that they cut by 50 basis points and expect another 50 basis points of cuts this year," noted Brian Jacobsen, chief economist at Annex Wealth Management.

(With inputs from agencies.)