By Lawrence Delevingne and Marc Jones
BOSTON/LONDON (Reuters) – U.S. equity indexes dipped and the dollar was firm on Wednesday after the Federal Reserve held interest rates steady and gave little insight into when further reductions in borrowing costs may take place.
After several months in which inflation data has largely moved sideways, the U.S. central bank dropped from its latest policy statement language saying that inflation “has made progress” towards the Fed’s 2% inflation goal, noting only that the pace of price increases “remains elevated.”
“Businesses are expanding operations, consumers have a healthy appetite for travel and leisure, and animal spirits are still elevated,” Jeffrey Roach, chief economist at LPL Financial, said in an email, referring to how emotions shape financial decisions. “These conditions make it difficult for the Fed to cut rates without reigniting broad inflation pressures.”
On Wall Street, the Dow Jones Industrial Average finished down 0.3%, while the S&P 500 and the Nasdaq Composite both lost about 0.5%, ahead of earnings from Microsoft, Meta and Tesla.
Following the market close, Microsoft beat quarterly revenue estimates, while Tesla’s fourth-quarter profit margin missed expectations. Meta forecast first-quarter revenue below Wall Street estimates.
European shares had earlier climbed to a record high as strong results from Dutch chip equipment maker ASML sent its stock soaring 5.5% and hoisted the wider tech sector up 2.4%. [.EU]
Investors seemed to have papered over the global rout suffered on Monday when the emergence of a lower-cost Chinese AI model, DeepSeek, wiped more than half a trillion dollars off Nvidia’s value alone.
MSCI’s gauge of stocks across the globe fell 0.17%.
BONDS STEADY, OIL PRICES SLIP
In bond markets, the 10-year U.S. Treasury yield was little changed at 4.549%, while the 2-year note yield, which typically moves in step with interest rate expectations for the Fed, ticked up 1.9 basis points to 4.224%.
European yields were also steady, with the European Central Bank expected to cut rates again on Thursday, while the yen nudged higher to 155.34 per dollar after the Bank of Japan’s meeting minutes pointed to more rate hikes there. [/FRX][GVD/EUR]
Traders also digested U.S. President Donald Trump’s latest tariff threats after the White House said he still plans to hit Mexico and Canada with steep tariffs on Saturday and he is “very much” considering some on China during the weekend.
The U.S. dollar was firmer against major currencies on Wednesday. It strengthened 0.35% to 0.907 against the Swiss franc and weakened 0.17% to 155.25 against the Japanese yen . The euro was down 0.17% at $1.041.
Oil prices fell on Wednesday, with the U.S. benchmark settling at a year-to-date low, after domestic crude stockpiles in the world’s top petroleum producer and consumer rose more than expected last week.
Brent crude futures settled down 91 cents, or 1.2%, at $76.58 a barrel. U.S. crude futures fell $1.15, or 1.6%, to $72.62.
The day’s crypto action came from the Czech Republic, where its central bank Governor Ales Michl said in an interview with the Financial Times that he would present a plan to the bank’s board on Thursday to buy bitcoin. He added that, if approved, the bank could eventually hold as much as 5% of its 140 billion euro ($146.13 billion) reserves in the cryptocurrency.
Bitcoin was last trading around $104,000, up about 3.6%. Gold prices slipped about 0.3%.
(Reporting by Lawrence Delevingne in Boston and Marc Jones in London; Editing by Will Dunham, Chris Reese and Jamie Freed)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibility for its content.