(Reuters) – The New York Stock Exchange ended lower on Wednesday despite the Federal Reserve’s decision not to raise key rates, the first since March 2022, as the central bank cooled investors by paving the way for a two possible increases by the end of the year.
The Dow Jones index fell 0.68%, or 232.79 points, to 33,979.33 points.
The broader S&P-500 gained 3.58 points, or 0.08%, to 4,372.59 points.
More optimistic, the Nasdaq Composite advanced 53.16 points (+0.39%) to 13,626.48 points.
The Federal Reserve’s Monetary Policy Committee (FOMC) responded to expectations after strong producer and consumer price data, leaving its key rates unchanged on Wednesday, a move it hadn’t done for ten meetings . The target remains set at 5.00%-5.25%, as expected by a large majority of experts polled by Reuters.
The Fed, on the other hand, blew the cold by opening the door to two further hikes of a quarter point each by the end of the year, a more “hawkish” attitude than investors had expected. not really anticipated.
Its chairman, Jerome Powell, stressed at a press conference that the members of the committee were in favor of continued monetary tightening.
He indicated that no decision had yet been taken for July, but that it would be a “live meeting” (open meeting) likely to lead to a rate hike.
The trend turned around on Wall Street after this announcement, although the S&P-500 finally ended slightly in the green in a sluggish market.
“Some expected the Fed to take a break this month, but also not to raise rates again,” said Sam Stovall, chief investment strategist at CFRA Research. “However, it appears FOMC members have become even more aggressive since the last meeting, and I think that caught investors off guard.”
Regardless of the “Fed effect”, health insurer United Health fell 6.4% after saying it expected higher medical costs in the second quarter, weighing on the Dow Jones.
On the other hand, the manufacturers of electronic chips Nvidia (+4.8%) and Broadcom (+4.1%) were sought.
(Written by Noel Randewich and Sruthi Shankar, Tangi Salaün)
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