WASHINGTON — The Federal Reserve opted on Wednesday to leave its benchmark interest rate unchanged, pausing its tightening campaign even as inflation readings remain elevated across the U.S. economy.
The decision by the Federal Open Market Committee passed with a 10-2 majority, Yahoo Finance reported. Cleveland Fed President Beth Hammack and Fed Governor Lisa Cook dissented from the decision, arguing instead that the central bank should implement an immediate interest rate increase.
The pause comes after the Fed lifted the federal funds rate last month for the first time in three years in an effort to cool consumer price growth, according to Fortune. Fed Chairman Kevin Warsh also announced Wednesday that the central bank will host one fewer policy-setting meeting next calendar year, Yahoo Finance reported.
Wall Street digests rate decision and tech momentum
Major U.S. stock indexes pushed higher as traders absorbed the policy outcome and turned their attention to corporate earnings. The Dow Jones Industrial Average and the S&P 500 both rose roughly 0.2% and 0.3%, respectively, while the tech-focused Nasdaq Composite gained about 0.3%, according to Yahoo Finance. Fortune reported the S&P 500 moved within 1.2% of the record high it established earlier in the month.
Gains in heavyweight technology and artificial intelligence firms helped counterbalance weakness across the broader market, where a majority of individual stocks fell, Fortune reported. Broadcom surged 4.2% after revealing a $63 billion financing arrangement involving Wall Street firms to supply AI accelerators and networking gear to Anthropic. Chipmaker Nvidia advanced 0.8%, and cloud compute provider CoreWeave jumped 8.5%.
Semiconductor equities found additional support after South Korean manufacturer SK Hynix reported a 632% surge in year-over-year quarterly profit, driving gains in peers Micron and Samsung, Yahoo Finance reported. Meanwhile, Oracle shares climbed after executives projected $225 billion in revenue by fiscal 2030.
Corporate earnings show stark divergences
Corporate reports beyond Silicon Valley reflected varied consumer and business pressures. Boeing slumped 10.2% after posting a larger quarterly loss than Wall Street had projected, according to Fortune. Hotel chain Hilton Worldwide dropped 2.6% on weaker summer sales and trimmed profit projections, citing escalating friction in the Middle East.
Paints manufacturer Sherwin-Williams dropped 1.9% following lower-than-expected earnings. Chief Executive Heidi Petz noted that high mortgage rates continue to weigh on home sales and housing activity, forecasting muted demand well into 2027 while raw material expenses stay high, Fortune reported.
In contrast, travel shares rallied in spots. JetBlue Airways soared 20.3% after Chief Executive Joanna Geraghty pledged a return to sustained operating profits next year, despite the carrier logging a wider summer loss. Cruise line Royal Caribbean Group gained 5.5% after topping earnings expectations and lifting its annual earnings forecast.
Elsewhere in corporate news, General Motors advanced 5.6% after disclosing plans to transfer its common stock listing to the Nasdaq from the New York Stock Exchange, where it had traded since 1911, Fortune reported.
What comes next
In fixed-income trading, the yield on the 10-year U.S. Treasury note slipped to 4.99% from 5.00%, aided in part by global crude benchmark Brent crude falling 1.2% to $109.41 per barrel, Fortune reported. Investors now await evening financial reports and capital expenditure outlooks from tech giants Alphabet and Microsoft, the latter of which recently offered buyouts to as many as 60,000 employees as it restructures operations, Yahoo Finance reported.
