Investing.com -- The S&P 500 snapped an seven-day wining streak in choppy trading Wednesday after the Federal Reserve delivered a larger 50 basis point rate cut, marking the first cut since March 2020.
By 4:00 p.m. ET (2000 GMT), the benchmark S&P 500 fell 0.3% and the tech-heavy Nasdaq Composite slipped 0.3%, and the 30-stock Dow Jones Industrial Average fell 0.3%, or 103 points. Stocks initially surged on the rate cut decision, before swinging wildly to eventually close in the red.
Fed delivers jumbo cut
The Federal Reserve cut interest rates by 50 basis points on Wednesday, and lifted forecasts for further rate cuts this year, as the central bank kicks off a rate-cut cycle to shore up the economy following a prolonged battle against surging inflation.
Heading into the decision, markets were split on whether the central bank would deliver a 25bps or 50 bps cut. The central bank also signaled that is expected to deliver two 25bps rate cuts this year, up from a June forecast for just one cut.
Today’s announcement is best characterised as a "hawkish 50bps," Capital Economics said in a Wednesday note, noting that the decision to cut by 50bps wasn't unanimous and that the Fed only expects an additional 50 bps of cuts between now and the end of the year.
U.S. Steel rises on report of Nippon Steel deal extension; Intuitive Machines rallies on $5B Nasa contract
Shares in United States Steel (NYSE:X) climbed after Bloomberg News reported that Nippon Steel had won an extension in the review of its $14.1 billion approach for the American steelmaker.A decision is now likely to be made only after the 2024 elections in November.
Intuitive Machines Inc (NASDAQ:LUNR) jumped 38% after winning a $5 billion contract from Nasa to provide lunar communications and navigation services.
In retail stocks, Victoria's Secret & Co (NYSE:VSCO) was a standout performer, rising 3% after Barclays (LON:BARC) upgraded the lingerie maker to equal weight from underweight, citing a more balanced valuation.
(Scott Kanowsky, Ambar Warrick contributed reporting.)