U.S. Stocks End Wednesday with Mixed Results

(MENAFN) U.S. markets closed with mixed results on Wednesday as the Federal Reserve implemented its first interest rate cut of the year, a decision widely expected by analysts but met with divergent investor reactions across sectors.

The Dow Jones Industrial Average rose 260.42 points, or 0.57%, finishing at 46,018.32, buoyed by gains in financial and consumer staples stocks. In contrast, the S&P 500 slipped 6.41 points, or 0.1%, to 6,600.35, while the Nasdaq Composite dropped 72.63 points, or 0.33%, closing at 22,261.33.

Market breadth was mixed: six of the S&P 500’s 11 major sectors posted gains, led by financials and consumer staples, which advanced 0.96% and 0.9%, respectively. However, technology shares fell 0.7%, and industrials declined 0.45%, dragging on broader gains.

The Fed’s decision to trim the federal funds rate by 25 basis points capped a two-day policy meeting and marked the start of a potential easing cycle. "Uncertainty about the economic outlook remains elevated ... The Committee is attentive to the risks to both sides of its dual mandate and judges that downside risks to employment have risen," the central bank said in a post-meeting statement.

Chair Jerome Powell emphasized that monetary policy would remain flexible. "It's an accumulation of the individual projections of 19 people," Powell said during a press briefing. "We're not on a preset path. Actual decisions will be based on the incoming data, the evolving outlook, and the balance of risks."

The Fed’s updated dot plot now signals two more rate cuts before year-end, aligning closely with market forecasts, while suggesting a slower pace in 2026—just one cut compared to the two or three currently expected by investors.

Scott Wren, senior global market strategist at Wells Fargo Investment Institute, said the Fed struck a balanced tone. "The FOMC (Federal Open Market Committee) threw the pitch right down the middle of the plate and gave the market virtually exactly what it expected. A cut at each of the 2 remaining meetings this year syncs perfectly with fed funds futures," he noted.

Wren added, "Only difference in number of cuts is the dots suggest just one time next year, but the market has been pricing in two cuts ... that will have little if any effect on the financial markets ... close enough. No surprise there is wide dispersion of projections for next year's policy adjustments."

Technology stocks, which have powered much of the 2025 rally, pulled back after the announcement as investors locked in profits. Shares of Nvidia, Oracle, Palantir, and Broadcom declined. Meanwhile, rate-sensitive blue chips helped lift the Dow, with Walmart, JPMorgan, and American Express ending higher.

MENAFN18092025000045017169ID1110077810