U.S. stocks showed mixed results on Wednesday amid concerns over possible U.S. involvement in the Israel-Iran conflict and the Federal Reserve’s decision to keep interest rates unchanged.
The Dow Jones Industrial Average dipped 0.1%, the S&P 500 hovered just below flat, while the Nasdaq Composite inched up about 0.1%. Earlier in the day, all three indexes had gained roughly 0.6%.
The Federal Reserve kept its key interest rate steady for the fourth consecutive meeting, maintaining the range at 4.25% to 4.5%. The central bank also released its Summary of Economic Projections, including the “dot plot,” which shows policymakers’ expectations for future rate moves.
The median forecast suggests the federal funds rate will drop to 3.9% by the end of 2025, implying two quarter-point rate cuts this year. However, officials remain divided, with some expecting no rate changes at all.
Fed Chair Jerome Powell explained that holding rates steady is the best approach for now, as the Fed watches how tariff-related inflation develops. He noted uncertainty about the impact of tariffs and emphasized that the costs of tariffs ultimately fall on consumers.
Meanwhile, geopolitical tensions added to market unease. Investors remain cautious about the possibility of the U.S. entering the Middle East conflict.
President Trump gave ambiguous answers when asked about potential military action against Iran, saying, “I may do it. I may not do it.” Iran has warned it will respond strongly if the U.S. crosses a red line and reportedly has missiles ready for strikes on U.S. bases in the region.
Oil prices edged slightly higher, with Brent crude holding above $76 a barrel and West Texas Intermediate near $75, reflecting concerns over Middle East instability.
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