The Dow Jones Industrial Average was modestly lower following the Federal Reserve’s latest policy update. The central bank maintained steady interest rates, and Chair Jerome Powell indicated a wait-and-see approach regarding the impact of President Donald Trump’s tariffs on inflation before making any rate adjustments. The Dow lost 44.14 points, or 0.10%, to close at 42,171.66.
The S&P 500 slipped 0.03% to 5,980.87, while the Nasdaq Composite inched up 0.13% to settle at 19,546.27. Powell highlighted the uncertainty around the tariff effects, stating, “The size of the tariff effects, their duration, and the time it will take are all highly uncertain. That is why we think the appropriate thing to do is to hold where we are as we learn more.”
President Trump reported that Iranian officials had reached out, suggesting a visit by a delegation to Washington for negotiations.
This comes amid escalating tensions between Israel and Iran, which have influenced oil prices. Iranian Supreme Leader, Ayatollah Ali Khamenei, warned of consequences if the U.S. intervened in the ongoing conflict. Despite the geopolitical risks, analysts remain cautiously optimistic.
“The market just seems very keen to fade geopolitical risk,” said Zachary Hill of Horizon Investments. The leading indexes finished little changed on Wednesday. The Dow dropped 44.14 points to settle at 42,171.66.
The S&P 500 edged lower by 0.03%, ending at 5,980.87, while the Nasdaq rose by 0.13%, closing at 19,546.27. DoubleLine Capital CEO Jeffrey Gundlach predicted that gold prices could soon hit $4,000, as institutions increase their gold purchases amid geopolitical uncertainty. “It’s a clear beneficiary of everything that’s been going on.
Dow dips slightly after Fed update
And it’s the one asset class that’s really doing well this year,” Gundlach said. Oil prices remained steady on Wednesday after President Trump claimed that Iran showed interest in negotiations over its nuclear program.
West Texas Intermediate crude futures rose 0.4% to close at $75.14 a barrel, while Brent crude increased by 0.25% to settle at $76.70 per barrel. Stifel recommended buying the dip in shares of Cava, a fast-casual restaurant chain, despite trimming its price target to $125 per share from $175. Analyst Chris O’Cull noted that the company’s average unit volume growth would likely outpace expectations.
The Federal Reserve kept interest rates unchanged on Wednesday. Despite holding rates steady, the central bank projected two rate cuts later this year due to rising stagflationary risks. The Fed also revised its economic growth forecast for 2025 downward to 1.4%.
Small-cap stocks showed significant gains on Wednesday. The Russell 2000 index rose by more than 1%, in contrast to the S&P 500’s increase of just 0.3%. Consumer discretionary stocks also outperformed, with the sector growing by 0.6%.
Caris Life Sciences made a strong debut in its initial public offering, opening at $27 per share, higher than the $21 pricing on Tuesday. The diagnostics stock quickly traded above the opening price, reaching $28.69 per share. Data indicate that the S&P 500 often loses gains during Jerome Powell’s press conferences following Federal Reserve meetings.
Despite the initial positive reactions to Fed announcements, the S&P 500 tends to dip as Powell fields questions from reporters.
