US close: Stocks mixed as Fed delivers pause with a caution

Wall Street demonstrated a mixed performance on Wednesday, as the US stock market reacted to the Federal Reserve's decision to halt the cycle of interest rate hikes.

Despite the pause, however, investors were warned by the central bank that the tightening cycle was not completely off the table.

At the close, the Dow Jones Industrial Average was down 0.68% at 33,979.33 , while the S&P 500 managed gains of 0.08% to settle at 4,372.59.

The tech-heavy Nasdaq Composite posted gains of 0.39% to 13,626.48.

On the currency front, the dollar was last 0.11% stronger on sterling to trade at 79.05p, while it inched up 0.04% on the common currency to 92.37 euro cents.

Against the yen, the greenback was last ahead 0.39%, changing hands at JPY 140.64.

“Any lingering hope of a rate cut this year seems to have gone following this meeting,” said IG chief market analyst Chris Beauchamp.

“A higher terminal rate is now expected, with two more hikes now seen as likely by the end of the year.

“This may change, but for now the Fed is sending a message that they are certainly not going to stay on pause for ever.”

Fed stands pat on interest rates for the moment

In a much-anticipated announcement, the Federal Reserve opted to forego a rate hike in its latest decision earlier in the day, deciding instead to await further data before potentially enacting stricter monetary policy.

The Fed's decision came despite it acknowledging the strength of job gains and the persistently high level of inflation in recent months.

Citing recent job growth as "robust," the central bank recognised the sustained progress in the labour market.

On the flip side, the inflation rate, a critical determinant of interest rate decisions, was still described as "elevated".

“Holding the target range steady at this meeting allows the Committee to assess additional information and its implications for monetary policy,” the policy statement read.

“In determining the extent of additional policy firming that may be appropriate to return inflation to 2% over time, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments.”

Meanwhile, a significant drop in wholesale prices last month was reported by the US Department of Labor.

Contrary to expectations, the final demand prices in May, on a seasonally adjusted basis, fell 0.3% month-on-month.

That decrease surpassed the consensus forecast of a 0.1% decline.

As a result, the annual rate of inflation fell from 2.3% in April to 1.1% in May.

Airlines ascend as summer kicks off, health insurers under pressure

In equities, Nvidia Corporation jumped 4.81% as it became the seventh public company in US history to end a trading day with a market capitalisation exceeding $1trn.

In the airline sector, the kick-off of a robust summer travel season drove gains for legacy carriers.

Delta Air Lines, American Airlines Group, and United Airlines Holdings closed the day with increases of 1.52%, 1.72%, and 0.3% respectively.

Delta’s performance was particularly noteworthy, as Wednesday marked its 14th consecutive session of gains.

On the downside, health insurers Cigna Group, Humana, and UnitedHealth Group saw their stock prices fall by 3.11%, 11.24%, and 6.4% respectively.

The downturn was triggered by a statement from UnitedHealth executives at a Goldman Sachs investor conference, suggesting that a backlog of Covid-delayed hip and knee surgeries could cause rising costs for the sector.

Reporting by Josh White for Sharecast.com.

Dow Jones - Risers

Nike Inc. (NKE) $112.86 5.69%
Intel Corp. (INTC) $35.58 4.92%
Walmart Inc. (WMT) $156.90 1.01%
Procter & Gamble Co. (PG) $146.42 0.94%
Microsoft Corp. (MSFT) $337.34 0.91%
Verizon Communications Inc. (VZ) $35.73 0.70%
Coca-Cola Co. (KO) $60.87 0.68%
Johnson & Johnson (JNJ) $161.65 0.51%
Apple Inc. (AAPL) $183.95 0.35%
Cisco Systems Inc. (CSCO) $50.96 0.31%

Dow Jones - Fallers

Unitedhealth Group Inc. (UNH) $459.86 -6.40%
Boeing Co. (BA) $216.90 -1.58%
Walt Disney Co. (DIS) $92.45 -1.49%
Travelers Company Inc. (TRV) $173.59 -1.46%
Walgreens Boots Alliance, Inc. (WBA) $31.51 -1.38%
Merck & Co. Inc. (MRK) $108.66 -1.21%
Goldman Sachs Group Inc. (GS) $338.49 -1.19%
Chevron Corp. (CVX) $157.11 -0.90%
Caterpillar Inc. (CAT) $243.32 -0.86%
3M Co. (MMM) $101.95 -0.77%

S&P 500 - Risers

Ipg Photonics Corp. (IPGP) $132.73 13.47%
CenturyLink Inc. (LUMN) $2.25 6.10%
Nike Inc. (NKE) $112.86 5.69%
Intel Corp. (INTC) $35.58 4.92%
Nvidia Corp. (NVDA) $429.97 4.81%
Oracle Corp. (ORCL) $122.27 4.79%
Boston Scientific Corp. (BSX) $53.31 4.20%
Stryker Corp. (SYK) $293.57 4.20%
Broadcom Inc. (AVGO) $886.18 4.12%
Estee Lauder Co. Inc. (EL) $192.16 4.06%

S&P 500 - Fallers

Fiserv Inc. (FI) $114.23 -100.00%
Humana Inc. (HUM) $455.00 -11.24%
CVS Health Corp (CVS) $66.65 -7.76%
Centene Corp. (CNC) $64.64 -6.94%
Elevance Health Inc. (ELV) $436.35 -6.89%
Unitedhealth Group Inc. (UNH) $459.86 -6.40%
Zions Bancorporation (ZION) $28.06 -5.74%
Keycorp (KEY) $9.91 -5.44%
Comerica Inc. (CMA) $41.44 -5.09%
Nektar Therapeutics (NKTR) $0.55 -4.77%

Nasdaq 100 - Risers

Liberty Global plc Series C (LBTYK) $18.23 5.38%
Liberty Global plc Series A (LBTYA) $17.22 5.32%
Intel Corp. (INTC) $35.58 4.92%
Nvidia Corp. (NVDA) $429.97 4.81%
Broadcom Inc. (AVGO) $886.18 4.12%
NetEase Inc. Ads (NTES) $98.64 3.37%
Baidu Inc. (BIDU) $147.21 3.25%
J.B. Hunt Transport Services Inc. (JBHT) $174.39 2.73%
Intuitive Surgical Inc. (ISRG) $323.07 2.42%
Micron Technology Inc. (MU) $69.12 1.84%

Nasdaq 100 - Fallers

Fiserv Inc. (FI) $114.23 -100.00%
Qurate Retail Inc. (QRTEA) $0.88 -9.23%
Dish Network Corp. (DISH) $6.31 -3.52%
DENTSPLY Sirona Inc. (XRAY) $38.06 -2.59%
Automatic Data Processing Inc. (ADP) $216.09 -2.00%
Expedia Group Inc. (EXPE) $108.86 -1.83%
PACCAR Inc. (PCAR) $78.06 -1.79%
Paychex Inc. (PAYX) $111.54 -1.74%
Henry Schein Inc. (HSIC) $74.80 -1.58%
Sirius XM Holdings Inc (SIRI) $3.77 -1.57%