Wall Street ended sharply lower on Wednesday after the Federal Reserve held U.S. interest rates steady and projected only a single rate cut for the year as officials took stock of economic risks from surging oil prices and the U.S. and Israeli war with Iran. New projections from U.S. central bank policymakers showed the Fed’s benchmark overnight interest rate would fall by just a quarter of a percentage point by the end of this year, with no hint of timing.
Major stock indexes extended declines after Fed Chair Jerome Powell held a news conference and reiterated the uncertainty the war creates for the economic outlook. Economists had not expected the Fed to change its interest rate. Earlier, the U.S. Labor Department said the Producer Price Index rose 3.4% year-on-year, exceeding economists’ 2.9% forecast, with prices at risk of accelerating further as the Middle East conflict lifts shipping and oil costs.
Brent crude extended gains and reached near $110 a barrel after an Iranian news agency reported that some facilities belonging to Iran’s oil industry in South Pars and Asaluyeh were attacked.
The S&P 500 declined 1.36% to end the session at 6,624.70 points, its lowest close in nearly four months. It is now down about 3% in 2026. The Nasdaq declined 1.46% to 22,152.42 points, while the Dow Jones Industrial Average declined 1.63% to 46,225.15 points. All of the 11 S&P 500 sector indexes declined, led lower by consumer staples .SPLRCS .SPLRCS , down 2.44%, followed by a 2.32% loss in consumer discretionary .SPLRCD .SPLRCD .
AMD.O gained 1.6% after agreeing with Samsung Electronics005930.KS 005930.KS to expand their strategic partnership on memory chip supplies for AI infrastructure. Nvidia NVDA.O NVDA.O dipped 0.8% after securing Beijing’s approval to sell its second-most-powerful artificial intelligence chips in China. Micron Technology MU.O MU.O dipped about 0.5% in extended trade after the memory chipmaker beat Wall Street estimates for quarterly revenue, benefiting from a surge in demand for its memory chips used in artificial intelligence hardware.
Asset manager Apollo Global Management APO.N APO.N rose 2.1%, rebounding from sharp losses in the previous week on private credit quality concerns. Lululemon LULU.O LULU.O surged 3.8% after the yoga-wear maker’s quarterly results. Founder Chip Wilson, who is in a proxy battle with the company, said lead director David Mussafer’s decision to exit the board was “a step in the right direction”, and reiterated the need for a “substantial” board refresh. Macy’s M.N M.N jumped 4.7% after the department store chain said it expected a comparatively smaller impact from tariffs in the second half of the year and beat quarterly profit estimates.
Declining stocks outnumbered rising ones within the S&P 500 .AD.SPX .AD.SPX by a 5.2-to-one ratio. The S&P 500 posted 17 new highs and 15 new lows; the Nasdaq recorded 42 new highs and 218 new lows. Volume on U.S. exchanges was relatively light, with 19.4 billion shares traded, compared to an average of 19.8 billion shares over the previous 20 sessions.
Reporting by Johann M Cherian and Utkarsh Hathi in Bengaluru, and by Noel Randewich in San Francisco; Editing by Anil D’Silva, Maju Samuel and David Gregorio.
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