The S&P 500 and Nasdaq declined after the first rate cut of the year and Powell's statements

The main U.S. index S&P 500 and "technological" Nasdaq ended in the negative trading on September 17 - after the U.S. Federal Reserve reduced the interest rate for the first time in 2025. At the same time, the stocks largely recovered the losses they suffered during the day, and the Dow Jones and Russell 2000 were able to rise. Investors didn't like Fed chief Jerome Powell's words that the rate cut was more about "risk management" than the start of a full-fledged cycle.

- The S&P 500 broad market index ended Wednesday down 0.1% to 6600.35 points. The index ended the day almost unchanged after volatile trading (at the moment it was falling by 0.8%).

- The Nasdaq Composite index of shares of companies in the technology sector lost 0.33%, falling to 22,261.3 points. Shares of technology companies such as Nvidia, Oracle, Palantir and Broadcom were under pressure: investors were taking profits after the Fed's decision, CNBC notes.

- The blue-chip index Dow Jones Industrial Average rose 0.57% to 46,018.3 points on September 17. At the same time, during the trades it updated the historical maximum, rising to 46,261.95 points. The index was supported by the securities of companies benefiting from the Fed's rate cuts, including Walmart, JPMorgan and American Express.

- Russell 2000, which reflects the dynamics of shares of small capitalization companies, grew by 0.18% - up to 2407.3 points. The index was supported by the reaction to the Fed's decision to cut rates, as small companies are more dependent on the cost of borrowing.

- The dollar rose on the day of the Fed's decision for the seventh straight time - the longest such streak since 2001, Bloomberg noted. US government bond yields fell slightly.

On September 17, the U.S. Federal Reserve (Fed) lowered the interest rate by 25 basis points to 4-4.25%. This was the first easing of monetary policy by the Fed in 2025. The regulator noted a slowdown in economic activity, lower job growth and higher inflation, while for the first time this year it refused to characterize the state of the labor market as "sustainable". The decision to cut the rate by 25 bps was almost unanimous, with Stephen Miran against it - and in favor of a 50 bps cut. - Stephen Miran, a new member of the Federal Open Market Committee (FOMC) nominated by US President Donald Trump, was against it and in favor of a 50bp cut.

The Fed projected another 50 bps rate cut this year and 25 bps next year. - next year. However, at a press conference after the publication of the Fed's decision, the regulator's head Jerome Powell said that Wednesday's rate cut should be seen as a manifestation of "risk management" as a "very different picture" of threats emerged in the labor market, CNBC reports. This was a signal to the market that the regulator's decision does not mean the beginning of a long cycle of easing monetary policy, but is more of an "insurance" in case of a sharp slowdown in the economy, the channel noted.

"Since it [the Fed's decision] is broadly in line with consensus opinion, we could see a 'buy on rumors/sell on news' reaction from the markets in the short term," said B. Riley Wealth Management senior market strategist Art Hogan. Riley Wealth Management's Art Hogan as quoted by Bloomberg.

While markets could use a breather, optimistic bulls will take advantage of the downturn to "buy on the drawdown" if the economy avoids a recession and corporate earnings forecasts continue to improve, said eToro analyst Bret Kenwell.

"The door is open for more rate cuts this year, but clearly they [FOMC members] are now more worried about the slowing labor market than inflation. Overall, today's news didn't cause any shocks or surprises," said Ryan Detrick, senior market strategist at Carson Group.

This article was AI-translated and verified by a human editor