The Dow Jones Industrial Average ended modestly lower following the Federal Reserve’s latest policy update. The central bank decided to keep interest rates steady, and Chair Jerome Powell indicated a cautious approach, waiting to observe the impact of President Donald Trump’s tariffs on inflation before making any adjustments to rates. The 30-stock index lost 44.14 points, or 0.10%, closing at 42,171.66.
The S&P 500 slipped 0.03% to close at 5,980.87, while the Nasdaq Composite inched up 0.13% to settle at 19,546.27. Despite keeping rates in the range of 4.25% to 4.5%, as expected, the Fed’s mixed signals about potential future rate cuts and talks of a stagflationary threat stirred investor unease. Policymakers lowered the 2025 forecast for economic growth to 1.4%.
Powell emphasized the uncertainty surrounding the effects of tariffs on inflation, suggesting a wait-and-see approach before making any adjustments to rates. Markets were tense earlier this week due to the escalating conflict between Israel and Iran, which has raised oil prices. On Wednesday, the attacks between the two countries entered their sixth day.
Iran’s supreme leader, Ayatollah Ali Khamenei, reiterated that Iran won’t surrender and warned the U.S. against entering the conflict. President Trump announced that Iran had signaled a willingness to negotiate, even proposing to send a delegation to Washington. The leading indexes ended the day with minimal changes.
The Dow dropped 44.14 points, or 0.1%, to settle at 42,171.66. The S&P 500 ticked 0.03% lower to end at 5,980.87, while the Nasdaq rose 0.13%, closing at 19,546.27. DoubleLine Capital CEO Jeffrey Gundlach predicted on Wednesday that gold prices could soon reach $4,000, driven by increased institutional buying amid geopolitical uncertainties.
Fed’s cautious approach amid tensions
Gold traded around $3,392.08 an ounce on Wednesday. Oil prices held steady after President Trump stated Iran’s interest in negotiating over its nuclear program.
Futures for U.S. oil rose 30 cents, or 0.4%, to close at $75.14 a barrel, while global benchmark Brent crude gained 25 cents, or 0.25%, to settle at $76.70 per barrel. McDonald’s is on pace for a fourth straight daily decline and is underperforming the market by a wide margin. The fast-food giant’s shares have dropped to their lowest level since early February, now trading below their 200-day moving average.
The stock’s relative strength index hit its lowest since May 2024. McDonald’s will report second-quarter results on July 23, with analysts expecting earnings of $3.15 per share, according to FactSet. The Federal Reserve kept interest rates unchanged on Wednesday but maintained its outlook for two interest rate cuts this year, in light of the rising threat of stagflation.
The Fed also revised the GDP outlook downward and increased the inflation forecast. Consumer discretionary stocks outperformed on Wednesday, with the S&P 500 sector rising 0.6%, the best performance among industries. Significant gains were observed in stocks such as Amazon and Tesla.
Caris Life Sciences opened at $27 per share in its initial public offering on Wednesday, above the $ 21-per-share pricing. The stock traded as high as $28.69 per share, more than 36% above the IPO price. The lead banks on the deal were Bank of America Securities, JPMorgan, and Goldman Sachs.
The stock market saw minor fluctuations on June 18, 2025, as investors digested the Federal Reserve’s cautious stance on interest rates and ongoing geopolitical tensions. Additionally, various sectors showed mixed performances, with notable movements in gold, oil, and consumer discretionary stocks.
