US stocks ended Wednesday with modest gains after the Federal Reserve held its main interest rate steady, despite inflation remaining above its 2% target. The S&P 500 rose 0.3%, while the Dow Jones Industrial Average added 97 points, or 0.2%, and the Nasdaq composite climbed 0.3%. The bond market saw more volatility, with the two-year Treasury yield initially spiking to 4.79% before reversing course to 4.69% after Fed Chairman Kevin Warsh signaled caution about future rate hikes.
Warsh emphasized that the Fed wants to assess economic conditions before making its next move, noting that higher loan rates and more discerning lenders suggest its 'monetary medicine' is starting to work. Traders scaled back bets on future rate hikes, though they still expect increases by next summer. The 10-year Treasury yield fluctuated but remained near 5.02%, influenced by rising oil prices amid Middle East uncertainty.
Several companies reported strong earnings, boosting their stocks. GE HealthCare Technologies surged 6.6% after beating revenue and profit expectations, while Etsy rose 5.4% on better-than-expected earnings. AI-related stocks stabilized, with Micron Technology gaining 5.9% after South Korea’s SK Hynix soared 10.9% on strong demand forecasts. Wendy’s jumped 15.1% following a buyout offer from Trian Fund Management.
Overseas, South Korea’s Kospi surged 6.6%, and Japan’s Nikkei 225 rose 1.1%, while France’s CAC 40 dipped slightly. The S&P 500 closed at 7,743.98, the Dow at 52,475.10, and the Nasdaq at 26,549.85.