The stock market fell again on Wednesday after the Federal Open Market Committee kept interest-rates steady at its July meeting.
The Dow Jones Industrial Average was down 172 points, or 0.4%. The S&P 500 was down 0.1%. The Nasdaq Composite rose nearly 0.2%.
Shares of retailers and copper miners slipped around the Fed’s decision after President Donald Trump shared details regarding orders to suspend the de minimis exemption for commercial shipments globally and put 50% tariffs on imports of semi-finished copper products. Stocks pared some losses after the president said he was meeting with South Korea’s trade delegation and reached a deal with Pakistan.
“We are very busy in the White House today working on Trade Deals,” Trump wrote. “Other Countries are making offers for a Tariff reduction. All of this will help reduce our Trade Deficit in a very major way. A full report will be released at the appropriate time.”
Stocks also dropped as Federal Reserve Chairman Jerome Powell refused to tease a September cut during his press conference. Instead, he said he expects to see tariff inflation in data ahead, though it’s possible such price increases are temporary.
“It seems to me—and to almost the whole committee—that the economy is not performing as though monetary policy is holding it back inappropriately and modestly restrictive policy seems appropriate,” Powell said.
The yield on the 2-year Treasury note rose to 3.94%. The 10-year yield was up to 4.38%. Odds of a September rate cut dropped to 46.2%, down from 59.7% prior to Powell’s presser.
Sevens Report Research’s Tom Essaye told Barron’s that with the market priced for perfection, some market participants were betting the central bank would begin laying the groundwork for a rate cut in September. Instead, Powell reiterated the path forward for rates will depend on a wave of labor market and inflation data in the months ahead.
“I think a September rate cut is still probably likely, and, on balance, the data this week has been good ‘Goldilocks’ data,” Essaye says. “But this is what was expected, and this is what is occurring. For us to move higher, we have to have something good that we didn’t expect.”
Earnings reports from Meta Platforms and Microsoft are due within the hour, with Apple and Amazon.com coming after the close tomorrow.
Friday’s nonfarm payrolls report will also be the first of several datapoints that feed into the Fed’s ultimate decision come September.