The Dow Jones Industrial Average gained 0.1%, while the S&P 500 index dropped 0.5%, and the Nasdaq Composite index fell 1.3%
U.S. benchmark stock indexes closed mostly lower Wednesday, after the Federal Reserve said it would likely hold interest rates near zero until at least 2023 given the outlook for inflation and employment in the wake of the coronavirus pandemic, but also indicated risks to the economy remain.
Initially, good earnings from the likes of FedEx provided some support, as did talk of coronavirus vaccine distribution plans by the White House, and upbeat sentiment about the latest batch of IPOs, including the cloud software company, Snowflake.
The Dow Jones Industrial Average added 36.78 points, or 0.1%, to finish at 28,032.38, while the S&P 500 index shed 15.71 points, or 0.5%, closing at 3,385.49. The Nasdaq Composite index fell 139.85 points, or 1.3%, after flipping between positive and negative territory in the session.
The Russell 2000 Index of small-capitalization companies, rose 14.18 points, or 0.9%, to close at 1,552.33.
On Tuesday, the Dow rose 2.27 points to finish at 27,995.60, while the S&P 500 gained 17.66 points, or 0.5%, to trade at 3,401.20, marking its third straight increase. The Nasdaq finished up 133.67 points, or 1.2%, at 11,190.32, logging back-to-back gains.
Stocks gave up earlier gains to close mostly lower Wednesday, after the Fed indicated it will keep rates near zero through at least 2023, but also warned of risks to the economy without additional fiscal stimulus during the coronavirus pandemic.
The Dow initially climbed 300 points in afternoon trade, after the Fed’s rate-setting committee indicated that future rate hikes will hinge on at least two things: labour market conditions return to the “maximum employment” and inflation has risen to 2% and “is on track to moderately exceed 2% for some time”.
But those gains faded after Fed Chair Powell reiterated that the economic downturn resulting from the pandemic is “the most severe in our lifetime,” in an afternoon news briefing. To that end, the central bank expects to keep up its “full range” of support up for some time, including its current $120 billion monthly pace of assets purchases in the form of government Treasurys and mortgage bonds until the economy is “far along in its recovery.”