The three major stock indexes on Wall Street swung widely intraday before finishing mixed.
On the 17th (U.S. Eastern time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average ended transaction up 260.42 points, or 0.57%, at 46,018.32. The Standard & Poor's (S&P) 500 fell 6.41 points, or 0.10%, to 6,600.35, while the Nasdaq Composite lost 72.63 points, or 0.33%, to close at 22,261.33.
The Federal Reserve (Fed) said it would cut the benchmark interest rate by 0.25 percentage point (p) through the Federal Open Market Committee (FOMC) regular meeting that ran for two days starting the day before. Of the members, only Federal Reserve Governor Stephen Myron, appointed by U.S. President Donald Trump, argued for a 0.5 p cut, while the rest agreed on a 0.25 cut.
Even though the dot plot hinted at additional rate cuts within the year and the Fed showed a "dovish" stance, stocks whipsawed as the market split over comments by Jerome Powell at the post-meeting press conference.
At the press conference, Chair Powell spent much time on concerns about a deterioration in the labor market. He said, "Downside risks have increased in the labor market," and noted, "The recent pace of job gains appears to be below the 'breakeven' level needed to keep the unemployment rate steady, and it is unusual to see both labor supply and demand slowing at the same time."
The stock indexes then extended losses. The Nasdaq fell as much as -1.23% during the session. The fact that a cooling labor market and worsening economy were behind the rate cut stoked market fear. However, stocks quickly pared losses after Powell said that the phenomenon of a tariff being passed on to consumers through higher goods prices has so far appeared only marginally.
On the day, blue-chip-heavy Dow and small- and mid-cap-heavy Russell 2000 outperformed, rather than the tech-heavy Nasdaq. Compared with tech stocks, small and mid caps and blue chips benefit relatively more from rate cuts.