Stocks End Mixed as Fed Rate Cut Splits Investors

U.S. stocks closed with uneven results Wednesday after the Federal Reserve cut interest rates by a quarter point, leaving investors weighing a mixed message on the outlook for growth and inflation.

The Dow Jones Industrial Average climbed 260.42 points, or 0.57%, to 46,018.3, boosted by cyclical shares that stand to benefit from easier policy. The Nasdaq Composite fell 72.63 points, or 0.33%, to 22,261.3, as technology stocks lagged on concerns about tighter profit margins and uncertain demand. The S&P 500 slipped 6.41 points, or 0.10%, to 6,600.35, finishing just below the flat line as broader markets struggled to find direction.

The divergence reflected investor ambivalence over the Fed’s

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Fed Chair Jerome Powell

The Fed’s latest dot plot projections showed most officials now expect at least three additional cuts by the end of 2025, a clear dovish tilt from June. Even so, a lone dissenter, Stephen I. Miran, pushed for a half-point cut, underscoring divisions within the Committee.

Bond yields whipsawed after the announcement, with the 10-year Treasury briefly dipping below 4% before reversing. Commodity markets reflected similar unease: crude oil futures fell 1.04% to $63.49, while gold slid 1.00% to $3,687.70.

For equities, the day’s trading pattern mirrored the Fed’s own balancing act. The Dow’s advance suggested optimism that easier policy will support growth, while the Nasdaq’s decline highlighted caution that inflationary pressures may persist. The S&P 500, caught in between, closed little changed, underscoring the uncertainty ahead.

Investors will now turn to incoming data for clarity on whether the Fed’s shift toward neutrality marks the start of a sustained easing cycle or a one-off adjustment. For now, markets remain divided — much like the policymakers themselves.