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U.S. stock markets slipped into the red on Wednesday, despite the Federal Reserve’s decision to cut interest rates by 50 basis points, as announced by Chair Jerome Powell in his latest speech.
The S&P 500 was down 0.15%, trading at 5,625.97, while the Dow Jones Industrial Average dropped 0.10% to 41,564.59. The tech-heavy Nasdaq also struggled, falling 0.16% to 17,599.52.
The market reaction came as a surprise, given that a rate cut often spurs investor optimism. However, traders appeared cautious as they digested Powell’s comments, which highlighted a cooling labor market and inflation nearing the Fed’s target of 2%. While the Fed’s move was aimed at supporting economic growth and stabilizing inflation, it failed to immediately boost market sentiment.
Despite the rate cut, investors seemed concerned about the broader economic outlook and the potential for slower future growth. Powell emphasized that the Fed’s decision-making would remain data-dependent, contributing to the uncertainty.
As the day progresses, market participants will be closely watching any further developments, particularly in economic indicators and corporate earnings reports, to gauge the Fed’s next steps in monetary policy.
Data as on time of publishing the article.