US stocks ended lower on Wednesday, reversing gains after comments by Federal Reserve Chairman Jerome Powell left investors wondering what the next interest rate move from the US central bank would be.
The indices initially held gains after the announcement of the fedwhich raised the interest rates a quarter of a percentage point, as expected, and signaled that it could take a pause in the cycle of increases.
The unanimous decision left the central bank’s benchmark overnight interest rate in a range of between 5.00% and 5.25%, the tenth consecutive increase since March 2022.
At the news conference after the release, Powell said the Fed still believes inflation is too high and said it was too early to say the tightening cycle was over.
“The Fed continues to walk a tightrope, and they are trying to balance their credibility in fighting inflation while engineering a soft landing,” said Michael Arone, chief investment strategist at State Street Global Advisors in Boston.
Before the session closed, investors were eager for any signal from the US central bank on whether Wednesday’s increase would be the last one, for now.
He S&P 500 it lost 28.83 points, or 0.70%, to 4,090.75 units; Meanwhile he Nasdaq Composite it fell 55.18 points, or 0.46%, to 12,025.33 units. He Dow Jones Industrial Average it was down 270.29 points, or 0.80%, at 33,414.24 units.
Investors worry that higher rates will send the economy into a recession.
Earlier in the session, data showed that private employers of USA They boosted hiring in April, but there were signs the labor market was slowing after several rate hikes.
Shares of Advanced Micro Devices fell after the chipmaker forecast quarterly sales below estimates due to a weak PC market.
