NEW YORK, Jan. 29 (Xinhua) -- U.S. stocks ended lower on Wednesday, as investors reacted to the Federal Reserve's decision to keep interest rates unchanged and its cautious tone on future rate cuts.
The Dow Jones Industrial Average fell 136.83 points, or 0.31 percent, to 44,713.52. The S&P 500 sank 28.39 points, or 0.47 percent, to 6,039.31. The Nasdaq Composite Index shed 101.26 points, or 0.51 percent, to 19,632.32.
Seven of the 11 primary S&P 500 sectors ended in red, with real estate and technology leading the laggards by losing 1.19 percent and 1.09 percent, respectively. Meanwhile, communication services and consumer staples led the gainers by going up 0.31 percent and 0.26 percent, respectively.
Fed on Wednesday kept its benchmark interest rate at 4.25 percent to 4.5 percent and indicated it was now on pause. Fed Chair Jerome Powell said U.S. rate-setters "do not need to be in a hurry to adjust our policy stance."
Technology stocks led the decline, with Nvidia and Microsoft dragging the market lower ahead of their earnings reports. The Fed's latest policy statement notably omitted previous language suggesting inflation had made progress toward its 2 percent target, reinforcing uncertainty about the central bank's next steps.
While the decision to hold rates steady was widely expected -- following three cuts in 2024 totaling a full percentage point -- investors were looking for clearer signals on the Fed's future course.
"We think the likely window for any future rate reductions won't open before May, and we expect the Fed to cut twice this year," said Matthias Scheiber, head of the multi-asset solutions team at Allspring Global Investments.
Powell also stated on Wednesday that he has had "no contact" with U.S. President Donald Trump following Trump's recent call for an immediate interest rate cut.
"I'm not going to have any response or comment whatsoever on what the president said," Powell said at his press conference on Wednesday afternoon.
"It's not appropriate for me to do so. The public should be confident that we will continue to do our work as we always have, focusing on using our tools to achieve our goals and really keeping our heads down and doing our work," he added.
Trump's comments last week had fueled speculation about potential political pressure on the Fed, but Powell reaffirmed the central bank's independence. Markets remain focused on future signals from the Fed, as well as earnings reports from major tech firms including Microsoft, Meta, and Tesla after the closing bell. ■
