The S&P 500 closed lower Wednesday as the Federal Reserve left interest rates unchanged, even as two policymakers dissented—the first double dissent since 1993—highlighting growing divisions over the future of monetary policy.
At the 4:00 p.m. ET close, the Dow Jones Industrial Average gained 171 points, or 0.4%, the S&P 500 slipped 0.1%, and the Nasdaq Composite rose 0.2%.
Fed Stays on Hold, But Tensions Rise
The Federal Open Market Committee (FOMC) kept its benchmark rate at 4.25%–4.5%. Governors Michelle Bowman and Christopher Waller opposed the decision, instead favoring a 25 basis-point cut. Their dissent underscores a widening split within the Fed as policymakers debate how long to keep rates elevated.
President Trump has continued pressing the central bank to cut rates quickly to support growth.
Economic data released earlier Wednesday painted a resilient picture: U.S. GDP expanded 3.0% in Q2, beating expectations of 2.5% and rebounding from a 0.5% contraction in the first quarter. Private payrolls also came in stronger than expected in July, rising 104,000 after a revised 23,000 decline in June, ahead of Friday’s nonfarm payrolls report.
Big Tech Earnings in Focus
Earnings season is hitting its peak, with nearly 82% of the 199 S&P 500 companies reporting so far topping estimates, according to FactSet.
After the bell, Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) will release results, followed by Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) on Thursday. Other notable reports expected include Arm Holdings (NASDAQ:ARM) and Robinhood Markets (NASDAQ:HOOD).
Several companies posted strong results Wednesday:
- Starbucks (NASDAQ:SBUX) surged after Q3 revenue topped expectations, signaling progress in its turnaround efforts.
- Humana (NYSE:HUM) jumped as it raised its full-year revenue outlook following a strong quarter.
- Etsy (NASDAQ:ETSY) gained on better-than-expected revenue, citing AI-driven personalization.
- VF Corporation (NYSE:VFC) climbed after beating revenue estimates on stronger demand for its apparel and footwear brands.
Trade Frictions Resurface
Markets also digested renewed trade concerns. Two days of U.S.-China talks in Sweden ended without major breakthroughs, though both sides called the discussions constructive and agreed to continue working toward an extension of their 90-day truce.
Separately, President Trump announced a new 25% tariff plus penalties on India, effective August 1, citing its purchases of Russian military and energy supplies. The move comes days after a framework trade deal was reached with the European Union, but agreements with other countries remain unresolved ahead of the looming tariff deadline.
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