U.S. Stocks Slide After Federal Reserve Interest Rate Cut
U.S. stocks ended with modest losses on Wednesday after the Federal Reserve cut interest rates by 50 basis points. The choppy trading day saw the S&P 500 and Dow hitting intraday highs before closing lower. The Fed's focus remains on inflation and maintaining a healthy labor market.
U.S. stocks closed with modest losses on Wednesday, reversing from their earlier intraday highs, after the Federal Reserve implemented a 50 basis point cut in interest rates, marking its first reduction in over four years.
Trading was volatile throughout the session. Before the Fed's announcement, the S&P 500 fluctuated between slight gains and losses, momentarily rising by 1% post-announcement before retreating and closing lower. Both the Dow and S&P 500 achieved intraday highs before softening. Highlighting increased confidence in reaching the Fed's 2% inflation target, the central bank reduced rates by 0.5%, shifting its emphasis towards sustaining a robust labor market.
Despite previous expectations fluctuating between a 25 and 50 basis point cut, the larger reduction came as a surprise to many market participants. The Dow Jones fell by 103.08 points, or 0.25%, ending at 41,503.10, while the S&P 500 and Nasdaq Composite declined by 16.32 points (0.29%) and 54.76 points (0.31%) respectively. With continued market anticipation of further rate cuts, stocks displayed mixed reactions, underscoring the complexities of investor sentiment even amid favorable policy moves.
(With inputs from agencies.)
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