US: Dow, S&P 500 end negative after dovish Fed decision
[NEW YORK] Wall Street finished a volatile session mostly negative on Wednesday after a dovish Federal Reserve signaled it expects no interest rate hikes in 2019.
The Dow Jones Industrial Average ended down 0.6 per cent at 25,745.67.
The broad-based S&P 500 dropped 0.3 per cent to 2,824.23, while the tech-rich Nasdaq Composite Index edged up 0.1 per cent to 7,728.97.
Stocks rallied shortly after the Fed kept interest rates unchanged and released a forecast for no interest rate hikes in 2019, a shift from an earlier projection of two increases this year.
But stocks pulled back after a press conference at which Fed Chair Jerome Powell emphasised that the US economy remained solid, even as the central bank trimmed its growth outlook for 2019.
Briefing.com analyst Patrick O'Hare described the market's initial surge as a knee-jerk reaction to a dovish central bank that investors later rethought.
The Fed's dovishness "invites some concerns about what it really implies about the global economic outlook," Mr O'Hare told AFP.
It raises the possibility "that US economy will disappoint," he said, adding that low interest rates could depress bank lending.
Cresset Wealth Advisors' Jack Ablin said the retreat in US stocks showed "investors are beginning to infer that the global economic slowdown is washing up on our shores."
Large banks suffered a bad session, with JPMorgan Chase losing 2.1 per cent and Goldman Sachs and Bank of America both shedding more than three percent.
But large tech companies rose, including Apple, which won 0.9 per cent, Facebook, which advanced 2.4 per cent and Netflix, which surged 4.6 percent.
Alphabet rose 2.1 per cent despite a 1.45 billion euro (S$2.27 billion) fine against its Google business by the European Union's anti-trust regulator over its AdSense advertising service.
FedEx shares slid 3.5 per cent after the company projected weaker-than-expected annual earnings, citing global economic weakness and increased spending on new automation and innovation upgrades.
AFP
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