Stocks were mixed on Wednesday after the Federal Reserve paused its rate-hiking campaign but signaled that there will be another two rate hikes this year. The Dow Jones Industrial Average dropped over 200 points, while the S&P 500 and Nasdaq Composite closed slightly higher.
Here's how the market settled on Wednesday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
In its highly anticipated (and expected) decision, the central bank kept interest rates unchanged at a target range of 5% to 5.25% on Wednesday, snapping a streak of 10 straight hikes. However, policymakers indicated that the median funds rate will rise to 5.6% by the end of 2023, implying two more hikes over the remaining four policy meetings this year.
"We raised our policy interest rate by five percentage points, and we've continued to reduce our security holdings at a brisk pace. We've covered a lot of ground, and he funn effects of our tightening have yet to be felt," said Fed Chair Jerome Powell at a news conference following the decision.
Earlier on Wednesday, a reading on producer prices showed inflation pressures are continuing to ease. The Producer Price Index (PPI) for May fell 0.3% month-to-month and rose 1.1% annually. This cooler-than-expected report follows Tuesday's consumer price index reading that showed the lowest annual increase in more than two years.
Elsewhere, Goldman Sachs raised its price target on AMD
"In data center GPUs, while predicting AMD's revenue potential is difficult, particularly given the level of customer concentration that is inherent to this business, we expect AMD to grow into a credible second supplier over the medium- to long-run, and await tangible evidence of customer design wins with the MI300A and/or MI300X," analyst Toshiya Hari wrote in a note to clients.
Looking ahead, market participants will continue to digest the Federal Reserve's latest policy decision and assess the latest reading for retail sales due out Thursday morning.
