US stocks climbed on Wednesday after the Federal Reserve decided to keep interest rates unchanged, as investors assessed the potential economic impact of President Donald Trump’s tariff policies and the central bank’s outlook.
The Federal Reserve maintained its benchmark interest rate in the 4.25%-4.50% range, in line with expectations, and projected two quarter-point rate cuts later this year.
However, policymakers remained divided on the appropriate course of action, reflecting uncertainty over the economic impact of trade tensions and inflation trends.
The Fed also adjusted its balance sheet strategy, slowing the pace of its drawdown to manage liquidity concerns amid ongoing political debates over the US government’s borrowing limit.
The central bank’s economic projections pointed to slower growth and persistent inflation pressures.
“Given growing worries around tariffs and how they could affect US growth and inflation,” Matthias Scheiber, head of the multi-asset solutions team at Allspring Global Investments in London said the Fed “took a widely expected ‘wait and see’ approach on rates.”
“For 2025, the interest rate market currently expects the Fed will cut rates to around 3.75% by year-end. A lot will depend on how the inflation-versus-growth trade-off develops—growth may continue weakening, and the Fed may need to cut rates more forcefully than expected,” he added.
Dow Jones, S&P 500, Nasdaq Composite all gain
Following the Fed’s decision, stocks posted solid gains.
The Dow Jones Industrial Average rose 228.44 points, or 0.55%, to 41,808.20. The S&P 500 gained 46.76 points, or 0.82%, to 5,660.52, while the Nasdaq Composite added 213.23 points, or 1.18%, closing at 17,715.71.
Investors interpreted the Fed’s guidance as largely in line with expectations, despite lingering concerns about inflation and economic growth.
Traders now see a 62.2% chance of at least a 25-basis point rate cut in June, according to data from LSEG.
The yield on the US 10-year Treasury note declined slightly to around 4.28% after hovering at 4.32% before the Fed’s announcement.
Why did the market go up if economic projections were in line with expectations?
Some analysts suggested that fears of a more hawkish Fed had kept markets cautious ahead of the announcement.
Emily Roland, co-chief investment strategist at John Hancock Investment Management, noted, “There is a whiff of stagflation to this. You’re seeing the Fed revising down their estimates for growth and revising up modestly their expectations for inflation.”
Despite the broadly expected policy decision, markets rallied in part due to relief that the Fed did not signal a more aggressive stance on inflation.
“There were whispers of the Fed potentially removing one of the projected cuts due to inflation concerns. Even though the report was as expected, the fact that they didn’t take a more hawkish turn reassured investors,” Roland added.
Silver extends losses
Silver extended its losses, hovering around $33.60 per ounce after the Federal Reserve held interest rates steady at 4.25%-4.5% while signaling possible rate cuts of 0.5 percentage points by 2025.
Despite economic uncertainty stemming from President Trump’s tariffs and fiscal policies, silver remains close to a five-month high as concerns over trade tensions escalate.
Lease rates have surged due to shrinking stockpiles, particularly in London, as silver shipments shift to the US to take advantage of higher prices.
This trend has widened price disparities across key markets, with spot silver rising 17% this year, outpacing most other commodities.
Meanwhile, physical silver transfers—especially from Canada and Mexico—face increasing pressure from tariffs, tightening supply further. Growing fears of a “silver squeeze” could disrupt trade flows for months to come.
Boeing shares jump
Boeing’s stock price rose 6% on Wednesday following CFO Brian West’s announcement that the company’s cash burn was slowing and production was improving.
West’s optimistic outlook for the struggling company, whose shares fell over 32% last year, provided a positive counterpoint.
He also downplayed immediate concerns related to President Donald Trump’s tariffs but warned that the ultimate impact would depend on the duration of the uncertainty surrounding international trade policy.
“We think we’re off to a good start for the year,” West said at a Bank of America investor conference.
Turkish stock ETF plunges after Erdogan rival’s arrest
An exchange-traded fund (ETF) that tracks Turkish stocks experienced a sharp decline on Wednesday following the arrest of President Recep Tayyip Erdogan’s political opponent, Ekrem Imamoglu.
The iShares MSCI Turkey ETF (TUR) experienced a significant decline, with shares falling 11.4%.
This decrease puts the ETF on track for its most substantial loss since December 17, 2021, when it dropped by 14%.
Williams-Sonoma slips
Williams-Sonoma’s stock price fell in morning trading on Wednesday, following the release of their underwhelming guidance for the upcoming year.
At the time of writing, the stock was down 5.9% from the previous close.
At one point, Williams-Sonoma’s share price fell 11% after the home furnishings retailer forecasted a potential decline in net revenue for the upcoming fiscal year ending in January 2026.
The company anticipates revenue to either remain flat or decrease by up to 1.5% compared to the previous year, attributing this projection to the fiscal year consisting of 52 weeks rather than the 53 weeks of the prior year.
The company admitted to $49 million in accounting adjustments due to overstated freight expenses in previous years.
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