The broader market rose higher Wednesday afternoon as investors looked towards the Federal Reserve's policy decision due out later in the session. The S&P 500 Index traded over 1% higher, further recovering from correction territory, while the Dow Jones Industrial Average climbed more than 380 points and the Nasdaq Composite advanced 1.4%.
Here's how the market settled on Wednesday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
The Federal Reserve held interest rates steady at their target range of 4.25% to 4.5% on Wednesday, in a decision that was broadly expected by Wall Street. Investors were encouraged by central bank policy officials signaling that they could reduce interest rates by another half percentage point through 2025, which could mean two cuts later this year.
However, Fed Chair Jerome Powell offered a hawkish tone during his post decision remarks, stating that policymakers plan to keep interest rates higher-for-longer if economic conditions call for more support.
"If the economy remains strong, and inflation does not continue to move sustainably toward 2%, we can maintain policy restraint for longer," Powell said. "If the labor market were to weaken unexpectedly, or inflation were to fall more quickly than anticipated, we can ease policy accordingly."
On Tuesday, UCLA Anderson Forecast issued its first-ever "recession watch," highlighting that the Trump administration's tariff and immigration policies, coupled with broad plans to reduce the federal workforce, could trigger economic contraction.
"While there are no signs of a recession happening yet, it is entirely possible that one could form in the near term," the forecaster said in its analysis titled, "Trump Policies, If Fully Enacted, Promise a Recession."
U.S. recessions can only be officially declared by the Business Cycle Dating Committee of the National Bureau of Economic Research -- factoring in economic indicators including production, employment, income and growth to determine contraction; recessions occur when multiple sectors contract at the same time.
UCLA Anderson Forecast said reductions in employment from the White House's immigration policies could create labor shortages, while tariffs will increase prices for consumers and could lead to a contraction in the manufacturing sector.
"If these and their consequent feedback into the demand for goods and services occur simultaneously, they create a recipe for a recession," the forecaster said.
In the News:
Boeing
Speaking at a Bank of America investor conference, West said the tariffs are unlikely to harm demand for its planes, noting Boeing has an order backlog of over 5,000 planes. The company also remains on track to increase monthly output of its MAX jetliners from the mid-20s to 38 planes and the Dreamliner from five to seven jets this year, West said.
