Market Rebounds Amid Trade Tensions: Fed Holds Steady

U.S. stocks rallied after the Federal Reserve maintained its interest rates, with traders reacting to President Trump's tariff policies. The Fed signaled potential rate cuts amid concerns over growth and inflation. Despite lingering uncertainties, stocks showed signs of recovery, led by consumer discretionary gains.

U.S. stocks made a strong recovery on Wednesday as the Federal Reserve decided to keep interest rates unchanged, a move widely anticipated by investors. This decision comes amidst the backdrop of President Donald Trump's ongoing tariff strategies, which continue to pose questions on economic growth and inflationary pressures.

The Federal Reserve left its benchmark overnight interest rate stable in the range of 4.25%-4.50%. It indicated the likelihood of two quarter-point rate cuts by year-end, mirroring forecasts made three months ago. The central bank also predicted slower economic growth and increased inflation. Divergences among policymakers highlighted ongoing uncertainty, particularly concerning Trump's policy impacts.

Meanwhile, European Union officials announced plans to tighten steel import quotas, curtailing flows by 15% in response to U.S. tariff escalations. Boeing's shares rallied on the assurance of minimal immediate tariff impacts. Despite pressures from economic indicators pointing to a cooling economy, the markets, led by consumer discretionary stocks, showed recovery signs, as evidenced by gains in key indices like S&P 500, Nasdaq, and Dow Jones.

(With inputs from agencies.)