US Stocks Decline After FOMC’s Interest Rate Decision

U.S. stocks ended Wednesday’s trading session in the red following the Federal Reserve’s announcement to keep interest rates unchanged, with the Fed’s Chair ruling out any near-term rate cuts.

The Dow Jones Industrial Average fell by approximately 0.4%, while the S&P 500 declined by about 0.2%. However, the tech-heavy Nasdaq Composite rose by roughly 32 points, or 0.2%.

Stocks on the New York Stock Exchange had previously received a boost from improved U.S. economic data, particularly the ADP Non-Farm Employment Change Index, which rose to levels exceeding market expectations, alongside U.S. GDP growth surpassing forecasts.

The Federal Reserve Chair dismissed the possibility of an imminent rate cut, citing concerns that inflation could rise to worrisome levels due to the potential impact of tariffs.

Powell also noted that labor market conditions still reflect “significant strength,” and the emerging impact of tariffs on consumer prices supports maintaining a restrictive monetary policy.

The U.S. ADP Non-Farm Employment Change Index, reported by ADP, increased by 14,000 jobs in July, compared to the previous reading, which recorded a decline of 23,000 jobs (revised upward from an initial -33,000). This exceeded market expectations of 76,000 jobs and marked the highest reading in four months.

U.S. GDP growth rose to 3.00% in the second quarter of this year, compared to -0.5% in the same period last year, surpassing market expectations of 2.4%.