Stocks finished firmly lower Wednesday, as investors assessed the Federal Reserve’s policy decision. The Dow slumped 333 points, posting its worst session since May, while the S&P 500 lost 1.1%. The Nasdaq Composite was down 1.2%. The major averages still notched solid monthly gains, with the Dow rising 1%, the S&P 500 climbing 1.3%, and the Nasdaq rallying 2.1% in July.
Investor attention was squarely on the Fed, with policymakers opting to reduce the benchmark interest rate by 0.25% to a target range of 2.00% – 2.25%, marking the first cut in more than a decade. In the post-meeting press conference, Fed Chair Jerome Powell referred to the move as a “mid-cycle adjustment,” indicating future easing was not guaranteed. Treasuries were mixed, with the yield on the 10-year note down four basis points to 2.01% and the yield on the two-year note up two basis points to 1.87%.
In earnings, Apple climbed 2% after the iPhone maker topped analyst estimates and provided a positive revenue outlook. General Electric edged lower despite boosting its full-year guidance. Advanced Micro Devices declined 10.1% after offering a disappointing revenue forecast.
On the data front, the ADP reported private payrolls increased by 156,000 this month after rising 112,000 in June. In commodities, WTI crude gained 0.9% to $58.58/barrel following a seventh consecutive weekly drawdown in U.S. stockpiles. COMEX gold slipped 1.2% to $1,412.90/ounce as the U.S. dollar touched its best level in more than two years. On the trade front, in-person talks between the U.S. and China concluded with no meaningful breakthroughs, though they agreed to reconvene in September.