American actions closed Wednesday after the Federal Reserve maintained the unchanged interest rates and Jerome Powell recognized the growing uncertainty surrounding economic prospects.
The S&P 500 increased by 0.43%, while the NASDAQ composite increased by 0.27%and the industrial average of Dow Jones added 284 points, or 0.7%.
Disney helped lift the DOW after reporting better than expected income and a surprise jump in Disney + subscribers in streaming.
As expected, the Fed has left its benchmark interest rate unchanged to a range of 4.25% to 4.5%, where it has been since December.
However, the tone of the post-reunion declaration and the Powell press conference underlined increasing concerns that inflation could remain sticky while the economy slows down.
“The committee is paying attention to the risks on both sides of its double mandate,” said the Fed in its press release, adding that “the risks of higher unemployment and higher inflation increased.”
Powell echoes these concerns, saying: “My instinct tells me that uncertainty about the economy is extremely high”, although he stressed that the negative results had not yet materialized.
Trade policies
The prudent position of the Fed comes as the Trump administration doubles on protectionist trade policies.
On Wednesday, former President Donald Trump told journalists that he would not reduce the prices on Chinese imports before the next American-Chinese sales talks in Switzerland.
“Significant increases in prices could result in a slowdown in growth, an increase in long -term inflation and an increase in unemployment,” said Powell.
The markets also reacted to a Bloomberg report that the Trump team could raise restrictions from the Biden era on IA flea exports, which increased Nvidia’s actions by around 2%.
However, Apple and Alphabet weighed on the Nasdaq, with sliding alphabet about 8% after a report suggested by Apple could end its default search engine partnership with Google in Safari, opting rather for its own research tools powered by AI.
