New York City — U.S. stock futures showed little movement Wednesday evening as the Federal Reserve made a widely anticipated decision to maintain its interest rate policy amid growing concerns over inflation and increased unemployment risks.
S&P 500 futures fell slightly by 0.1%, while Nasdaq-100 futures mirrored this decline. Futures associated with the Dow Jones Industrial Average decreased by 42 points, also reflecting a 0.1% drop. The Fed kept its benchmark overnight borrowing rate steady at 4.25% to 4.5%, a range that has been unchanged since December, when the central bank opted for a quarter-point rate cut.
In a statement following its latest meeting, the Federal Reserve acknowledged rising uncertainties regarding the economic landscape, indicating a cautious stance. “The Committee is attentive to the risks on both sides of its dual mandate,” the statement read. Furthermore, it noted heightened concerns about the dual challenges of rising inflation and potential unemployment increases.
During a press conference, Fed Chair Jerome Powell emphasized that a proactive rate cut was not in the cards. He pointed out that inflation rates are still above the Fed’s target, making any preemptive adjustments unjustified. “We actually don’t know what the right responses to the data will be until we see more data,” Powell stated.
Amid these complexities, Chris Zaccarelli, chief investment officer at Northlight Asset Management, remarked on the Fed’s challenging position. “The Federal Reserve is in a bind—with inflation worries and a sluggish economy pulling them in opposite directions,” he explained. He cautioned that unless timely trade agreements are reached before the existing tariff pause concludes, the market might face further declines similar to those witnessed in early April.
After the Fed’s announcement, the S&P 500 initially fluctuated but ultimately closed 0.43% higher, buoyed by a more than 3% upswing in Nvidia shares following reports that the administration is considering lifting restrictions on semiconductor trade. The tech-heavy Nasdaq Composite also experienced a 0.27% rise, while the Dow Jones Industrial Average finished 0.7% up.
Looking ahead, investors are bracing for crucial economic reports set to be released Thursday. Weekly jobless claims data is scheduled for 8:30 a.m. ET, ahead of the market opening, while the New York Fed’s Survey of Consumer Expectations will be available later in the day.
In what is a significant week for earnings reports, ConocoPhillips and Warner Bros. Discovery are set to announce their latest figures before the market opens. Paramount Global will provide its earnings after the close, alongside other notable companies such as travel firm Expedia.
In after-hours trading, shares of AppLovin surged over 13% as the company exceeded Wall Street expectations with its quarterly results, alongside news of an agreement to divest its mobile gaming segment. Conversely, Arm Holdings saw a decline of more than 11% following a disappointing forecast from the semiconductor company.