WASHINGTON (dpa-AFX) - Stocks turned in a lackluster performance throughout much of the session on Wednesday before seeing substantial volatility in afternoon trading following the Federal Reserve's highly anticipated monetary policy announcement.
The major averages showed wild swings back and forth across the unchanged line before eventually closing mixed. While the Dow climbed 260.42 points or 0.6 percent to 46,018.32, the S&P 500 edged down 6.41 points or 0.1 percent to 6,600.35 and the Nasdaq fell 72.63 points or 0.3 percent to 22,261.33.
The late-day volatility on Wall Street came following the Federal Reserve's widely expected announcement of its decision to lower interest rates by a quarter point.
The Fed said it decided to lower the target range for the federal funds rate by 25 basis points to 4.0 percent to 4.25 percent, citing a shift in the balance of risks.
The latest projections from Fed officials also suggest they expect the central bank to lower rates two more times this year, with rates forecast in a range of 3.50 percent to 3.75 percent by the end of 2025.
Traders may have been disappointed that Fed officials don't appear eager to cut interest aggressively, with only newly sworn in Fed Governor Stephen Miran preferring to lower rates by half a point at the latest meeting.
'The strong vote for the 25-basis-point cut suggests that members, while acknowledging that downside risks to the job market have increased, are not panicking about the state of the economy,' said Mortgage Bankers Association SVP and Chief Economist Mike Fratantoni.
The latest forecasts also suggest Fed officials currently only expect one rate cut next year, although there were significant differences of opinion on the outlook.
The central bank's next monetary policy meeting is scheduled for October 28-29, with CME Group's FedWatch tool currently indicating an 89.1 percent chance the Fed will lower rates by another quarter point.
Sector News
Reflecting the lackluster close by the broader markets, most of the major sectors ended the day showing only modest moves.
Banking stocks showed a strong move to the upside, however, with the KBW Bank Index climbing by 1.3 percent to a record closing high.
On the other hand, oil service stocks moved lower along with the price of crude oil, dragging the Philadelphia Oil Service Index down by 1.1 percent.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan's Nikkei 225 Index fell by 0.3 percent, while China's Shanghai Composite Index rose by 0.4 percent and Hong Kong's Hang Seng Index surged by 1.8 percent.
The major European markets also ended the day mixed. While the French CAC 40 Index slid by 0.4 percent, the German DAX Index and the U.K.'s FTSE 100 Index both crept up by 0.1 percent.
In the bond market, treasuries came under pressure in the latter part of the session, closing notably lower. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 5.0 basis points to 4.076 percent.
Looking Ahead
Trading on Thursday may continue to be impacted by reaction to the Fed announcement, while reports on initial jobless claims and leading economic indicators are also likely to attract attention.
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