S&P 500 ends down after late reversal despite Fed's low-rate stance
The S&P 500 ended lower on Wednesday, reversing gains late in the day as losses in technology shares outweighed a Federal Reserve statement that stoked optimism it would keep U.S. interest rates near zero for a prolonged period.
The index initially extended gains and the Dow briefly rose more than 1% after the Fed kept rates near zero and promised in its policy statement to keep them near there until inflation is on track to “moderately exceed” the U.S. central bank’s 2% target “for some time.”
New economic projections showed most policymakers see interest rates on hold through at least 2023.
The Dow Jones Industrial Average rose 36.78 points, or 0.13%, to 28,032.38, the S&P 500 lost 15.71 points, or 0.46%, to 3,385.49 and the Nasdaq Composite dropped 139.86 points, or 1.25%, to 11,050.47.
The central bank’s two-day meeting was its first under a newly adopted framework that promises to shoot for inflation above 2% to make up for periods where it runs below that target.
The statement and comments by Fed Chair Jerome Powell were “even more dovish than the market expected,” said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey. “It telegraphed to the market that the Fed intends to remain accommodative.”
Late losses likely followed declines in technology shares, she said. “What you’re seeing is some profit-taking in the tech sector. That’s where the selling is.”
Reference: Reuters
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