U.S. stocks close mixed after Fed's decision


  • World
  • Thursday, 13 Jun 2024

NEW YORK, June 12 (Xinhua) -- U.S. stocks ended mixed on Wednesday, as the Federal Reserve maintained its key interest rate as expected and indicated that only one cut is likely before the year's end.

The Dow Jones Industrial Average fell by 35.21 points, or 0.09 percent, to 38,712.21. The S&P 500 added 45.71 points, or 0.85 percent, to 5,421.03. The Nasdaq Composite Index increased by 264.89 points, or 1.53 percent, to 17,608.44.

Seven of the 11 primary S&P 500 sectors ended in green, with technology and industrials leading the gainers by going up 2.46 percent and 0.93 percent, respectively. Meanwhile, energy and consumer staples led the laggards by dropping 1.09 percent and 1.00 percent, respectively.

The Federal Open Market Committee (FOMC), following its two-day meeting, revised its March projection, removing two anticipated rate reductions and suggesting a higher long-term interest rate.

New forecasts released after the meeting showed cautious optimism about inflation returning to the Fed's 2 percent target, allowing for potential policy easing later in the year. The post-meeting statement noted, "Inflation has eased over the past year but remains elevated," with a new addition highlighting "modest further progress toward the committee's 2 percent inflation objective."

Earlier in the day, as Fed officials were finalizing their economic and rate outlooks, the Bureau of Labor Statistics released the consumer price index (CPI) report for May. The report indicated that inflation was flat month on month, with the annual rate edging down to 3.3 percent from April's rate.

During the press conference after the announcement, Federal Reserve Chair Jerome Powell said the report was better than almost anyone had expected and that it was a significant factor in the FOMC's decision to hold rates steady.

"We see today's report as progress and as, you know, building confidence," Powell said. "But we don't see ourselves as having the confidence that would warrant beginning to loosen policy at this time."

"This is a nothing-burger Fed meeting. They know conditions are improving, but don't need to rush with rate cuts," said David Russell, global head of market strategy at TradeStation. "The strong economy is letting Jerome Powell wring inflation out of the system without hurting jobs. Goldilocks is emerging but policymakers don't want to jinx it."

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