The Nasdaq exhibited a mixed performance, with the Dow concluding lower and the S&P 500 remaining unchanged. This followed the Federal Reserve’s announcement of an interest rate cut, although Fed Chair Jerome Powell introduced uncertainty regarding the possibility of another rate cut in December. The Dow Jones Industrial Average declined 0.2%, or 74.37 points, to close at 47,632 points, following a record high achieved in the session prior to the rate cut announcement. The S&P 500 experienced a decline of 0.30 points, concluding at 6,890.59 points, following the achievement of a new all-time high in the preceding session. Technology equities experienced an uptick, whereas sectors such as consumer staples, real estate, and materials faced the most significant declines. The Technology Select Sector SPDR increased by 0.7%. However, the Consumer Staples Select Sector SPDR lost 2.4%, while the Real Estate Select Sector SPDR declined 2.7%. The Materials Select Sector SPDR experienced a decline of 2%. Eight of the 11 sectors of the benchmark index concluded the trading session in negative territory. The tech-heavy Nasdaq, however, increased by 0.6%, or 130.98 points, to finish at 23,958.47, achieving a new all-time closing high.

The fear gauge, CBOE Volatility Index, experienced an increase of 3.05%, reaching a level of 16.92. On the NYSE, the ratio of decliners to advancers stood at 2.16 to 1. On the Nasdaq, a ratio of 2.28-to-1 indicated a preference for declining issues. On Wednesday, the trading volume reached 20.71 billion shares, which is below the 20-session average of 21 billion shares. On the Nasdaq, the market recorded 1,453 new highs alongside 3,306 new lows. On the New York Stock Exchange, the market recorded 476 new highs and 170 new lows. The Federal Reserve reduced interest rates by a quarter percentage point at the conclusion of its two-day FOMC meeting on Wednesday, adjusting its benchmark policy rate to a range of 3.75-4%. The central bank has now implemented a reduction in interest rates by 25 basis points for the second time this year, with the initial cut occurring in September.

The rate cut was widely expected, with investors positioning themselves for an additional 25-basis-point reduction in the Federal Reserve’s December meeting. However, investor sentiment was adversely affected after Powell failed to provide a definitive outlook on future rate cuts. While Powell did not dismiss the potential for a quarter-point rate cut in December, he indicated that Fed officials hold markedly divergent perspectives on the appropriate course of action. Powell indicated that the decision regarding a rate cut in December is contingent upon multiple factors. However, he acknowledged that inflation has moderated and is progressing toward the Fed’s 2% target. The Dow swiftly changed direction following the Fed’s announcement and Powell’s remarks, having reached a record high earlier in the session. The blue-chip index surged by as much as 334 points at its peak during the session, only to relinquish all of those gains subsequently.

The 10-year Treasury yield experienced a notable increase, surpassing 4% following Powell’s remarks. Equities that typically suffer from elevated interest rates experienced a decline. Shares of stocks such as McDonald’s Corporation and Costco Wholesale Corporation concluded the trading session down by 1.3% each. The Nasdaq exhibited superior performance relative to its counterparts, notwithstanding Powell’s hawkish remarks. The rally was driven by a surge in NVIDIA Corporation’s stock after the AI darling achieved the milestone of becoming the first company to reach $5 trillion in market cap. NVIDIA’s shares experienced a 3% increase. Investors were keenly anticipating Trump’s upcoming meeting with Chinese President Xi Jinping in South Korea. Investors express optimism that the upcoming meeting, the inaugural one since 2019, will contribute to alleviating trade tensions between the two largest economies globally. Market participants are paying keen attention to the earnings reports. A number of the “Magnificent Seven” names, such as Microsoft Corporation, Alphabet, Inc. and Meta Platforms, were scheduled to report their quarterly results after Wednesday’s closing bell.