Equities Mixed as Traders Parse Powell's Remarks After Fed Rate Cut

04:55 PM EDT, 09/17/2025 (MT Newswires) -- US equities closed mixed Wednesday as Wall Street tracked Federal Reserve Chair Jerome Powell's remarks after the central bank delivered its first interest rate cut of 2025.

The Dow Jones Industrial Average rose 0.6% to 46,018.3, while the Nasdaq Composite fell 0.3% to 22,261.3. The S&P 500 slipped 0.1% to 6,600.4. Among sectors, financials led gainers, while technology saw the biggest drop.

The central bank's Federal Open Market Committee reduced its benchmark lending rate by 25 basis points Wednesday, as widely expected, noting increased downside risks to employment and signaling further policy easing later in 2025.

"Recent indicators suggest that growth of economic activity moderated in the first half of the year," the FOMC said following its two-day meeting. "Job gains have slowed, and the unemployment rate has edged up, but remains low."

Newly appointed Fed Governor Stephen Miran preferred a 50-basis-point reduction at the Wednesday meeting, and was the sole dissenter, according to the FOMC.

At his post-meeting press conference, Powell characterized the Fed's policy move as a "risk management cut."

"Powell's press conference provided a little bit of a head fake, as he described significant additional downside risks to employment, but characterized the rate cut as 'a risk management rate cut'," Jefferies Chief US Economist Thomas Simons said in a report e-mailed to MT Newswires.

US Treasury yields were mostly higher in Wednesday late-afternoon trade, with the two-year rate rising 3.3 basis points to 3.55% and the 10-year rate adding 3.1 basis points to 4.07%.

"Whether this cut was one of 'risk management' or not, we do not think there is anything in today's communication that takes another cut, or a pause, off the table for October," Simons said, reiterating Jefferies' expectation for a 25-basis-point cut at each of the next two FMOC meetings.

The FOMC's Summary of Economic Projections showed Wednesday that policymakers now see the median federal funds rate at 3.6% at the end of this year, down from 3.9% estimated in June. They also lowered their rate outlooks for 2026 and 2027.

Policymakers continue to see the unemployment rate at 4.5% this year, but reduced expectations to 4.4% from 4.5% for next year and to 4.3% from 4.4% for 2027. They raised their annual economic growth projections through 2027 and held their inflation outlook steady for this year.

"We believe the Fed's near-term economic projections remain overly pessimistic, leading us to anticipate a slower pace of easing in upcoming meetings," Oxford Economics Deputy Chief US Economist Michael Pearce said in remarks e-mailed to MT Newswires.

"Our forecast is for the next (25-basis-point) cut to come in December," Pearce wrote. "However, given the deep divide on the committee, the Fed will be sensitive to any additional negative surprises in the incoming labor market data."

In other economic news, US housing starts tumbled more than projected in August amid weakness in both single- and multi-family units, while building permits dropped for the fifth straight month, government data showed.

The middle of October is expected to be the best time to buy a house in the US this year amid higher inventory, lower prices and less competition, according to a report by News Corp's (NWSA) Realtor.com.

West Texas Intermediate crude oil was down 1% at $63.87 a barrel in Wednesday late-afternoon trade.

In company news, Alibaba Group (BABA) and ByteDance are among the major Chinese tech companies that were recently informed by the Cyberspace Administration of China to terminate their testing and orders of Nvidia's (NVDA) RTX Pro 6000D artificial intelligence chips, the Financial Times reported, citing unnamed sources.

Nvidia (NVDA) shares were down 2.6%, the biggest drop on the Dow, while Alibaba's (BABA) US-listed shares rose 2.4%.

Manchester United (MANU) expects revenue in fiscal 2026 to be lower than the prior year, while the UK soccer club's fourth-quarter loss narrowed as its topline improved. The company's US-listed shared tumbled 6.3%.

Workday (WDAY) shares jumped 7.3%. The cloud human resources company should be able to meet its medium-term growth targets disclosed Tuesday, RBC Capital Markets said in a note e-mailed Wednesday.

Also on Tuesday, Workday said it agreed to acquire Sweden-based AI company Sana Labs for about $1.1 billion. Workday and Microsoft (MSFT) announced a collaboration to help companies securely manage their people and AI agents across platforms.

In a Wednesday regulatory, Workday said its board authorized the repurchase of up to $4 billion of additional shares.

Gold was down 0.9% at $3,693.40 per troy ounce, while silver lost 2.4% to $41.90 per ounce.

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