The stock market saw gains in a turbulent trading session on Wednesday as investors navigated news from the Federal Reserve and ongoing trade tensions. The S&P 500 rose by 0.43% to close at 5,631.28, the Nasdaq Composite gained 0.27% to end at 17,738.16, and the Dow Jones Industrial Average climbed 284.97 points, or 0.70%, to settle at 41,113.97. The day’s movement came after the Federal Open Market Committee (FOMC) indicated that the risks for economic slowdown and higher prices are increasing.
The Fed kept the federal funds rate unchanged in a range between 4.25% and 4.5%, where it has been since December. Fed Chair Jerome Powell emphasized concerns over potential economic impacts from ongoing trade issues. During his post-decision press conference, he noted that increased tariffs could lead to an economic slowdown, higher long-term inflation, and increased unemployment.
Markets were also influenced by trade developments. President Donald Trump stated he would not lower tariffs on China as a condition to begin trade negotiations, with meetings set between U.S. and Chinese officials in Switzerland this weekend to discuss trade matters.
Market gains defy trade tensions
In corporate news, notable movements included a nearly 11% rise in Disney shares after reporting earnings that surpassed expectations and a surprise jump in streaming subscribers. Conversely, Alphabet and Apple shares saw declines after Apple’s services chief noted that artificial intelligence search engines might eventually replace current search engines like Google’s. Among sectors, utility stocks showed strength.
According to BTIG chief market technician Jonathan Krinsky, utility stocks, particularly consumer-facing electricity and natural gas providers, are performing well and are poised for a breakout. Amidst these developments, Barclays highlighted the growing risk of a recession due to prolonged trade negotiations. “The longer uncertainty persists without any concrete progress on deals, the higher recession risk is,” noted Emmanuel Cau, Barclays’ head of European equity strategy.
Stocks making significant moves included Alphabet, which fell 8%, and Disney, which climbed 11% after robust earnings. Cloud computing firms also saw downward pressure, with some stocks dropping despite reporting solid financial results. As the day concluded, traders and investors continued to keep a close eye on policy developments and economic indicators, looking for any signs that could hint at future market directions.
