LIVE MARKETS-US stocks dip as Fed holds steady, big earnings on deck

ReutersJan 29, 2025 9:14 PM

Main U.S. indexes end red; Nasdaq off most, down ~0.5%
FOMC leaves rates unchanged
Dollar edges up; bitcoin up ~4%; gold dips; crude off >1%
U.S. 10-Year Treasury yield slips to ~4.54%

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U.S. STOCKS DIP AS FED HOLDS STEADY, BIG EARNINGS ON DECK

U.S. stocks closed lower on Wednesday, but off their worst levels of the session after briefly extending declines in the wake of the Federal Reserve's latest policy announcement, as investors await earnings from several megacaps.

The Federal Reserve held interest rates steady on Wednesday and gave little insight into when further reductions in borrowing costs may take place in an economy where inflation remains above target, growth continues, and the unemployment rate is low.

"The market got it right, perfectly... the market correctly sniffed out that this was going to be flat," said Ellen Hazen, chief market strategist at F.L.Putnam Investment Management in Lynnfield, Massachusetts.

"It's slightly hawkish in the language change - they're no longer talking about labor conditions easing, but rather being stable. And they're also no longer talking about inflation easing, but rather remaining elevated."

In comments after the statement, Chair Jerome Powell said the central bank it was still too soon to determine what President Donald Trump's policies will mean for the economy and that officials are waiting to see what policies are enacted."

According to the CME's FedWatch Tool, the market is now pricing in a nearly 80% chance the Fed will hold rates steady again at its March meeting. However, expectations for a cut at the June meeting of at least 25 basis points stand at 70.1%.

By the end of the session, real estate .SPLRCR and tech .SPLRCT were the worst performing of the 11 S&P 500 sectors with declines of more than 1%, while communication services .SPLRCL, up 0.31%, was the best performing.

Investors will now brace for earnings and outlooks from megacap companies Tesla TSLA.O, Microsoft MSFT.O and Meta META.O after the closing bell.

Below is your closing market snapshot:

(Chuck Mikolajczak)

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FOR WEDNESDAY'S EARLIER LIVE MARKETS POSTS:

S&P 500 ADDS TO LOSSES AS FED HOLDS RATES STEADY - CLICK HERE

EXPECT VOLATILITY, AND ADJUST ACCORDINGLY - CLICK HERE

MORTGAGE DEMAND DIPS AS RATES STAY ELEVATED, GOODS TRADE GAP AT WIDEST SINCE MARCH 2022 - CLICK HERE

GLOBAL TECH ROUT A CORRECTION, NOT A BEAR MARKET, GOLDMAN SACHS SAYS - CLICK HERE

U.S. STOCKS SUBDUED IN EARLY TRADE AHEAD OF FED, BIG EARNINGS - CLICK HERE

BENCHMARK TREASURY YIELD ON THE BACK FOOT AHEAD OF THE FED - CLICK HERE

US STOCK ROTATION OR RECESSION? IT MATTERS FOR THE DOLLAR - CLICK HERE