U.S. stock markets closed mixed after the Fed maintained status quo regarding the Fed fund rate in its latest FOMC meeting. Investors also considered Fed Chairman Jerome Powell’s statement in which he denied restarting of the rate hike regime. Market participants also continued to weigh several mixed economic data. The Dow ended in positive territory, while the S&P 500 and the Nasdaq Composite finished in negative zone.

How Did The Benchmarks Perform?

The Dow Jones Industrial Average (DJI) rose 0.2% to close at 37,903.29. Notably, 15 components of the 30-stock index ended in negative territory while 15 ended in positive zone. The tech-heavy Nasdaq Composite finished at 15,605.48, sliding 0.3% due to weak performance by U.S. corporate behemoths.

The major loser of the Dow was NIKE Inc. NKE. The stock price of this sportswear giant fell 2.1%. NIKE currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The S&P 500 fell 0.3% to finish at 5,018.39. Six out of11 broad sectors of the broad-market index ended in negative territory, while five in positive zone. The Energy Select Sector SPDR (XLE) and the Technology Select Sector SPDR (XLK) fell 1.6% and 1%, respectively. On the other hand, the Utilities Select Sector SPDR (XLU) rose 1.2%.  

The fear-gauge CBOE Volatility Index (VIX) was down 17% to 15.39. A total of 12.26 billion shares were traded on Wednesday, higher than the last 20-session average of 11.08 billion. Advancers outnumbered decliners on the NYSE by a 1.38-to-1 ratio. On Nasdaq, a 1.50-to-1 ratio favored advancing issues.

Fed’s FOMC Meeting

The Federal Reserve kept the benchmark lending rate steady at its existing range of 5.25-5.5%. The interest rate stayed at this range since July 2023. The Fed said “lack of further progress” in the reduction of the inflation rate was primary reason to keep the rate intact.

Fed’s post-FOMC statement said that FOMC members “greater confidence” that inflation is falling toward 2%. Powell said, “So far this year, the data have not given us that greater confidence. It is likely that gaining such greater confidence will take longer than previously expected. We are prepared to maintain the current target federal funds rate for as long as appropriate.”

However, the FOMC voted to ease the pace at which it is reducing bond holdings on the central bank’s gigantic balance sheet. The Fed started this program in June 2022 and was known as “quantitative tightening.” Fed’s latest decision could be viewed as an incremental loosening of monetary policy.

Economic Data

Institute of Supply Management reported that manufacturing index for April came in at 49.2%, below the consensus estimate of 49.8% and March’s data of 50.3%. any reading below 50% indicates contraction in manufacturing activities.

The Department of Commerce reported that construction spending decreased 0.2% in March in contrast to the consensus estimate of an increase of 0.3%. The metric for February was revised upward to a break-even from a decline of 0.3% reported earlier.

ADP reported that private payrolls in April came in at 192,000, higher than the consensus estimate of 183,000. However, April’s data was lower than the upwardly revised 208,000 in March.

The Department of Labor reported that job openings declined in March, fell to a seasonally adjusted 8.49 million, marking the lowest level since February 2021.

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