The three major US stock indexes gyrated after the Fed’s policy statement revealed the decision to hold rates steady was its most divided since 1992, along with uncertainties concerning rising energy prices due to turmoil in the Middle East.
It was likely the Fed’s last policy meeting under Jerome Powell, who vowed at the subsequent press conference that he would stay on as governor.
Crude prices jumped after the White House confirmed reports that US President Donald Trump told officials to prepare for a prolonged blockade of Iranian ports, which suggests ongoing supply pressures due to restricted traffic in the crucial Strait of Hormuz.
“The longer this conflict in Iran goes and energy prices remain elevated, and the global uncertainty remains, there will be an expectation of that having some sort of effect on spending habits, which will show up at some point in some level in the next round of corporate earnings,” said Matthew Keator, managing partner in the Keator Group, a wealth management firm in Lenox, Massachusetts.
A White House official said Trump had met with top officials from Chevron and other energy companies to talk about possible steps to calm oil markets in case a prolonged blockade of Iranian ports continues for months.
Rising energy prices have revived fears of broader inflation, even as the Federal Reserve concluded what is probably its last policy meeting of the Powell era by leaving its key interest rate unchanged, as expected.
Four of the companies that comprise the Magnificent Seven group of artificial intelligence-related megacap firms, Amazon, Alphabet, Meta Platforms and Microsoft, released quarterly results after the bell.
In extended trading, Alphabet shares were up over 3 percent, Amazon and Microsoft were down more than 3 percent and Meta was off more than 6 percent.
The Philadelphia SE Semiconductor index rose 2.4 percent, having gained 45.0 percent so far this year.
“Of course, the numbers matter,” Keator added. “But it’s not about what they did in this past quarter, but what they see going forward in terms of capex spending and how AI might affect their business model.”
The S&P 500 fell less than 0.1 percent, to 7,135. The Dow shed 0.6 percent, to 48,861, while the Nasdaq rose less than 0.1 percent, to 24,673. (Reuters)
