On Wednesday, U.S. stocks experienced fluctuations as investors absorbed the Federal Reserve's decision to maintain current interest rates and considered Fed Chair Powell’s cautious comments amidst escalating geopolitical and economic uncertainties. The S&P 500 ended the day with a slight decrease, the Dow dropped by 44 points, while the Nasdaq saw a minor increase of 0.1%. Powell highlighted the Fed's cautious approach, given the uncertainty surrounding the inflationary impacts of President Trump’s tariffs and the potential risk of stagflation. Officials forecasted two rate cuts for 2025, although they also downgraded growth projections and raised inflation expectations.
Markets were further unsettled by increasing tensions in the Middle East. The ongoing conflict between Israel and Iran heightened concerns about possible wider U.S. involvement, contributing to a slight increase in oil prices. President Trump confirmed that Iran had shown an interest in negotiations but didn’t rule out military action, keeping the markets on edge. Additionally, shares of Visa, Mastercard, and PayPal each dropped over 4% following the passage of Congress's stablecoins act.
