Stocks reversed gains late in the session Wednesday as Federal Reserve Chair Jerome Powell threw cold water on markets, which had pretty much baked in an interest rate cut in September. He said no decisions have been made.
The Fed views its “current policy stance as an appropriate guide against inflation risks,” Powell noted at a press conference after U.S. Central Bank’s regular meeting where opted to hold interest rates steady. In an unusual move, two Fed Governors dissented. It’s the first time two governors have dissented on a monetary policy decision in more than three decades, according to news reports.
In the red: Shares of Disney, Comcast, Fox, Paramount and TKO are down. Exhibitor and broadcaster stocks are pretty much all lower, as are Amazon, Apple, Snap and Meta, which reports earnings after the bell today. Warner Bros, Discovery is up. So is Netflix. Spotify and Fubo also bucked the downturn after recent upbeat financials and commentary.
The Dow is down nearly 300 points, reversing earlier gains. The S&P 500 and Russell 2000 are all off their highs for the day just ahead of the close.
This is the fifth meeting in a row of steady rates as Powell continues to defy Donald Trump, who has been agitating for a rate cut and threatening on and off to fire Powell.
Powell reiterated that the U.S. and governments around the world have long recognized the critical role of an independent central bank to make monetary decisions based on data alone, not on political or election considerations.
Central bank policymakers are maintaining the Fed’s benchmark interest rate in the 4.25%-4.5% range where it’s stayed throughout 2025 following a full percentage point cut last fall. That was before President Trump’s trade wars and aggressive tariff policies injected significant uncertainty in the global macroeconomic picture.
The Fed’s Federal Open Market Committee said in their statement today that economic growth has “moderated” in the first half of the year. That was a downgrade from calling the economy “solid” in its last statement in June.
The Fed also noted it views the job market as “solid” but inflation as “somewhat elevated.” Officials said that “uncertainty about the economic outlook remains elevated.” In June, they said that “uncertainty has diminished, but remains elevated.” Markets reading the tea leaves didn’t like what they heard.
President Trump has repeatedly asked for rates to be 3 percentage points lower. In a flurry of posts on Truth Social he said “’Too Late’ [his nickname for Powell] MUST NOW LOWER THE RATE … “No inflation! Let people buy, and refinance, their homes!”
