US Equity Indexes Fall Amid Mixed Messaging From Federal Reserve on Path Ahead for Interest Rates

05:15 PM EDT, 10/09/2025 (MT Newswires) -- US equity indexes declined at the close on Thursday as the Federal Reserve's meeting minutes failed to boost risk sentiment amid mixed messaging from top central bank officials, and gold sank following a ceasefire between Israel and Hamas.

The Dow Jones Industrial Average fell 0.5% to 46,358.42, with the S&P 500 down 0.3% to 6,735.11 and the Nasdaq Composite less than 0.1% lower at 23,024.63, off its session lows. All sectors except consumer staples fell intraday, with industrials, energy, and materials emerging as the steepest decliners.

Fed Chair Jerome Powell offered no further insights on policy in a recorded address to a conference in Washington on Thursday. Late on Wednesday, the minutes from the Sept. 16-17 Fed meeting showed division among policymakers on the path and pace of rate cuts, even though most rate-setters were open to additional policy easing.

Based on the meeting minutes, Fed officials were not "very dovish" in mid-September, according to a note from the Macquarie Group. And since then, non-official inflation indicators have not pointed to inflation easing, but rather to prices turning hotter, Thierry Wizman, global foreign-exchange and rates strategist, said in a research note.

"With stocks rallying, gold spiking, and corporate credit spreads remaining tight, the OIS-implied probability of a Fed cut on October 29 seems to be too high. The right ballpark should be a 50-75% probability," Wizman said.

Fed Governor Michael Barr on Thursday underscored the possibility of tariffs-linked inflationary pressures becoming more persistent, urging policymakers to move cautiously on further interest rate cuts, according to prepared remarks for delivery at an Economic Club of Minnesota event.

However, New York Fed President John Williams supported further policy easing, citing gradually slowing inflation and weakening labor market indicators during an interview with The New York Times.

Most US Treasury yields rose, with the two-year yield up 1.3 basis points to 3.6% and the 10-year rate 1.1 basis points higher at 4.14%.

Meanwhile, Israel and Hamas reportedly signed a ceasefire and hostage release deal that is expected to take effect after Tel Aviv ratifies it. Gold futures dropped 1.9% to $3,991.52, retreating from an all-time high. Silver futures slumped 2.9% to $47.61, also declining from a record. West Texas Intermediate crude oil futures sank 1.7% to $61.47 a barrel.

The US federal government's partial shutdown entered its ninth day on Thursday. If no deal is reached by Oct. 15, two million active-duty military members and hundreds of thousands of federal workers will miss paychecks, according to a news report from USA Today.

The ICE US Dollar Index, which measures the greenback against a basket of currencies, rose 0.5% to 99.38.

In company news, Delta Air Lines (DAL) issued an upbeat Q4 earnings outlook amid improving sales trends, after results for the prior three-month period topped market estimates. Shares jumped 4.3% intraday, among the top gainers on the S&P 500.

PepsiCo (PEP) reported better-than-expected fiscal Q3 results and set out an improved full-year outlook for earnings amid easing foreign-exchange headwinds. Its shares were among the top gainers on the Nasdaq, up 4.2% at the close.

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