US stocks bounced around on Wednesday afternoon as investors assessed Federal Reserve Chair Jerome Powell’s remarks about the outlook for the economy after the Fed held rates steady, matching expectations.
The Dow was up 325 points, or 0.8%, after briefly sliding as the decision to hold rates steady was announced. The S&P 500 was up 0.3% after shifting between gains and losses. The Nasdaq Composite was down 0.1%, though off its lowest levels of the day.
“I don’t think we can say, you know, which way this will shake out,” Powell said. “I think there’s a great deal of uncertainty about, for example, where tariff policies are going to settle out and also when they do settle out, what will be the implications for the economy, for growth and for employment.”
Kevin Gordon, senior investment strategist at Charles Schwab, said Powell’s “continuous mention of not knowing the impacts of tariffs emphasizes how hamstrung the Fed is right now.”
“The economy was in a solid place before the tariff turmoil and the hard data have continued to look resilient, which means the Fed can stay on hold for longer,” Gordon said. “Even though he didn’t give specific guidance about a future rate cut, his language suggests that the next cut is quite far down the road.”
The yield on the 10-year Treasury note hovered around 4.28%. The US dollar index, which measures the dollar’s strength against six major foreign currencies, gained 0.4%.
“We don’t have to be in a hurry,” Powell said. “The economy has been resilient. It is doing fairly well. Our policy is well positioned. The costs of waiting to see further are fairly low, we think.”
“The wait for data to assess the health of the economy continues,” said John Ingram, CIO and partner at Crestwood Advisors.
