Wall Street’s major stock indices increased on Wednesday after the Federal Reserve announced its decision on interest rates. The regulator kept the federal funds rate at the current range of 4.25% to 4.50% annually. Following the news, stock indices reacted positively, with the Dow Jones Industrial Average rising by 1.2%. The S&P 500 index climbed approximately 1.41%, and the Nasdaq Composite increased by nearly 1.3%.
The Fed’s decision matched market expectations, as investors had anticipated no change to interest rates at this meeting. Market participants welcomed the move amid ongoing concerns over trade tensions and economic uncertainty. According to data provided by the London Stock Exchange Group (LSEG), investors currently expect at least two rate cuts of 25 basis points each by December 2025. Market analysts believe the first rate reduction could happen as soon as July.
Chris Senyek, Chief Investment Strategist at Wolfe Research, provided additional insights into the market’s outlook. He noted a growing likelihood that upcoming employment data could be weaker than previously forecasted. Senyek also suggested this scenario might lead the Fed to consider reducing interest rates at its June meeting.
Despite the positive reaction in the stock market, some experts caution investors about continued volatility ahead. Wolfe Research analysts expect equity markets to remain under pressure due to uncertainty regarding tariff policies. Recently introduced tariffs by the U.S. administration continue to weigh on investor sentiment, adding uncertainty to economic growth forecasts.
During the trading session, technology and financial stocks showed significant gains. Shares of major banks, including JPMorgan Chase, Bank of America, and Citigroup, increased between 1.5% and 2.0%. Technology giants like Apple, Microsoft, and Alphabet also posted gains ranging from 1.3% to 2.2%.
Bond markets reacted with moderate stability after the Fed’s announcement. The yield on the benchmark 10-year U.S. Treasury note remained around 3.6%, showing minor fluctuations throughout the trading day. Short-term Treasury yields saw a slight decline, reflecting investors’ expectations of future rate cuts.
In currency markets, the U.S. dollar weakened modestly against a basket of major currencies. The Dollar Index, which tracks the U.S. dollar’s value against major currencies, declined approximately 0.25%. Meanwhile, the euro and British pound strengthened slightly against the U.S. dollar, rising by 0.2% and 0.3%, respectively.
Gold prices maintained high levels after recently reaching historic peaks. Spot gold traded at approximately $3,030 per ounce during Wednesday’s session, slightly lower than its recent record high of $3,047.5 per ounce reached earlier in the week.
Energy markets also displayed moderate gains. Brent crude oil futures rose by around 1.1%, trading at $78.50 per barrel, while West Texas Intermediate (WTI) crude increased by approximately 1.3%, reaching nearly $74 per barrel.
Asian stock markets showed mixed reactions to the Fed’s announcement. Japan’s Nikkei 225 rose about 0.5%, while China’s Shanghai Composite declined slightly by 0.2%. Hong Kong’s Hang Seng Index closed the trading day with a small increase of 0.3%.
European markets showed positive movements ahead of the Fed’s decision announcement. The pan-European STOXX 600 index gained roughly 0.7%, led by growth in banking and automotive sectors. Germany’s DAX increased by about 0.9%, while France’s CAC 40 gained around 0.8%.
The Federal Reserve’s latest economic projections, released alongside the rate decision, showed slightly revised expectations for GDP growth in 2025. Officials anticipate a modest slowdown in economic growth compared to previous forecasts, citing ongoing trade tensions and global uncertainties.
Prepared based on materials from Reuters and LSEG.
