On Wednesday, the S&P 500 Index closed down 0.03%, the Dow Jones down 0.10%, and the Nasdaq 100 remained unchanged. Federal Reserve Chair Jerome Powell’s hawkish comments triggered a wave of long liquidation in equities, impacting market sentiment. The Fed left interest rates steady at 4.25%-4.50% while altering growth and inflation forecasts, cutting the 2025 GDP estimate to 1.4% and raising core inflation expectations to 3.1%.
In economic news, U.S. weekly jobless claims fell to 245,000, and housing starts dropped 9.8% to a five-year low of 1.256 million, below expectations of 1.350 million. Navigational signals for over 900 vessels in the Strait of Hormuz were disrupted due to “extreme jamming” from Iran, amid ongoing geopolitical tensions and hostilities in the region.
Market reaction included significant declines for credit card issuers, with Mastercard falling over 5%, and Visa down more than 4%. In contrast, Coinbase surged over 16% after a partnership announcement. Bank stocks rallied amidst reports of regulatory easing on capital rules for Treasury trades.
