Stocks Climb as Fed Stands Pat on Rates; Google Tumbles on Apple AI Shift

U.S. markets finished in the green Wednesday after the Federal Reserve opted to keep interest rates unchanged and investors weighed fresh developments in the AI and semiconductor sectors.

The Dow Jones Industrial Average rose 284.97 points, or 0.70%, to 41,114. The S&P 500 added 24.35 points, or 0.43%, closing at 5,631.26. The Nasdaq Composite climbed 48.50 points, or 0.27%, to 17,738.20. The small-cap Russell 2000 index advanced 0.63 points, or 0.32%, ending the session at 197.40.

Ask Aime: How to invest wisely amid AI and semiconductor sector volatility?

Fed Chair Jerome Powell emphasized the central bank’s cautious stance, stating: “The risks of higher unemployment and higher inflation appear to have risen, and we believe that the current stance of monetary policy leaves us well positioned to respond in a timely way to potential economic developments."

Ask Aime: What's next for the market after Fed's rate decision?

The Federal Open Market Committee voted unanimously to maintain the federal funds rate at a target range of 4.25% to 4.5%, citing persistent inflation and global trade-related uncertainty. Powell noted that the labor market remains strong and inflation has eased from its peak but remains above the Fed’s long-term goal of 2%.

Google Sinks as Apple Eyes AI in Search Shake-up.

Tech stocks showed mixed performance, weighed down by a sharp slide in Google-parent alphabet shares. The stock dropped more than 6% after Bloomberg reported that apple may integrate AI-driven search engines like Perplexity into Safari, Apple’s web browser.

Apple executive Eddy Cue testified during Alphabet’s ongoing antitrust trial that the company had seen a recent decline in Safari search traffic, attributing it to growing user adoption of AI-based tools. Although Apple currently has no plans to sever its $20 billion search deal with google, Cue signaled that AI search could eventually supplant traditional engines.

Trump hints at easing chip curbs to aid U.S. exports.

Meanwhile, policy shifts from the White House stirred the chip sector. President Donald Trump signaled he may roll back global AI chip export restrictions as part of a broader effort to deepen ties with Gulf countries. The announcement, reported by CNBC, marks a potential reversal of limits introduced under the Biden administration, which had cited national security concerns over exports to the Middle East and possible technology transfers to China.

The potential easing of these rules could boost U.S. chipmakers like Nvidia, which has criticized the existing export curbs as damaging to American competitiveness. Industry reactions remain split, with firms like Amazon-backed Anthropic calling for stronger safeguards against diversion of AI technologies to foreign actors.

As traders digest a landscape shaped by Fed policy, AI disruption, and global tech regulation, one thing remains clear: volatility is back, and so is uncertainty.