Fed's Steady Stance Sends Stocks Spiraling

U.S. stocks fell on Wednesday as the Nasdaq declined over 1% following the Federal Reserve's decision to hold interest rates steady. Investors anticipated the move and are keen for clues on future rate cuts. Tech giants like Nvidia and Microsoft led the descent amid economic uncertainty.

U.S. stocks deepened losses on Wednesday, with the Nasdaq dropping more than 1%. This downturn followed the Federal Reserve's announcement to maintain current interest rates without signaling when future reductions could occur.

The stock market was already on a downward trend before the Fed's announcement, particularly among tech giants such as Nvidia and Microsoft. Notably, the Fed removed language suggesting inflation progress towards its 2% target from its policy statement.

The expected decision to keep rates steady follows three consecutive rate cuts in 2024, which lowered the benchmark rate by a full percentage point. Analysts predict the Fed may not cut rates again until May, with expectations of two cuts this year. Nvidia led a tech selloff, down 6%, while Microsoft's shares fell by 1.1% after reports of competitive AI developments by a Chinese startup.

(With inputs from agencies.)