Markets Pause While Investors Await Powell’s Fed Guidance/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stocks traded cautiously Wednesday morning as Wall Street awaited the Federal Reserve’s first rate cut of 2025. The decision is widely expected, but investors are focused on guidance for future cuts. Workday and Lyft gained sharply, while General Mills and RCI Hospitality slumped.
Markets Await Fed Quick Looks
- S&P 500 down 0.1%, near record high.
- Dow Jones up 252 points (+0.6%).
- Nasdaq Composite down 0.5%.
- Fed expected to cut rates by 0.25%.
- Focus on Fed outlook for more cuts.
- Job market slowdown seen as key driver.
- Inflation still above 2% target, pressured by tariffs.
- Workday +8.8% after Elliott stake disclosure.
- Lyft +14.3% on Waymo partnership in Nashville.
- General Mills -1.3% despite profit beat.
- RCI Hospitality -8% after bribery allegations.
- StubHub IPO launches on NYSE at $23.50.
- Japan’s Nikkei slips 0.2% as exports to U.S. plunge.
- 10-year Treasury yield eases to 4.02%.
Deep Look
Investors Brace for Fed’s First Rate Cut of 2025
NEW YORK — Wall Street traded cautiously Wednesday as investors held their breath ahead of the Federal Reserve’s afternoon policy announcement, where officials are expected to deliver the first interest rate cut of the year.
The S&P 500 edged down 0.1%, hovering near Monday’s record high. The Dow Jones Industrial Average rose 252 points (0.6%), while the Nasdaq slipped 0.5% as of mid-morning.
What the Fed Decision Means
Markets overwhelmingly expect the Fed to trim its benchmark rate by a quarter-point, bringing it to roughly 4.1%. But the cut itself is less important than Fed Chair Jerome Powell’s outlook for the rest of 2025 and beyond.
Traders expect multiple rate cuts in the coming months to cushion the economy amid signs of a slowing labor market. Unemployment data has shown it is harder for Americans to secure jobs, a factor increasingly outweighing inflation concerns.
Still, inflation remains stubbornly above the Fed’s 2% target, fueled in part by President Donald Trump’s tariffs on imported goods. That has complicated the central bank’s balancing act: cutting too aggressively risks reigniting inflation, but cutting too slowly risks a deeper slowdown.
Powell will also present updated economic projections, which investors will scrutinize for clues about how far and fast rates might fall.
Corporate Movers on Wall Street
- Workday (+8.8%) surged after hedge fund Elliott Investment Management revealed a $2 billion stake and backed its leadership. The enterprise software company also boosted its stock buyback program to $4 billion, signaling confidence in growth.
- Lyft (+14.3%) jumped on news it will launch an autonomous ride-hailing service in Nashville in partnership with Waymo, expanding its push into self-driving technology.
- General Mills (-1.3%) disappointed despite reporting stronger-than-expected quarterly profit. Revenue only matched analyst forecasts, and the company warned that investments in brands like Blue Buffalo pet food could weigh on future earnings.
- RCI Hospitality Holdings (-8%), which owns Rick’s Cabaret and other adult entertainment venues, plunged after New York’s attorney general accused executives of bribery and tax evasion.
- StubHub IPO: Shares of the ticketing giant began trading on the New York Stock Exchange under the ticker STUB at an IPO price of $23.50.
Global Market Snapshot
Overseas, markets were mixed. Japan’s Nikkei 225 fell 0.2%, retreating from record highs after data showed exports to the U.S. dropped nearly 14% year-over-year in August, with auto shipments particularly hit by Trump’s tariffs.
In Europe, trading was more balanced, reflecting investor uncertainty ahead of the Fed’s decision.
Bond Market Movement
In U.S. Treasuries, yields slipped slightly. The 10-year Treasury yield fell to 4.02% from 4.04%, reflecting demand for safe assets as investors awaited the Fed’s guidance.
What’s at Stake
Wall Street has rallied to record levels this year, largely on expectations of looser monetary policy. But any signal from Powell that the Fed might cut fewer times than markets anticipate could rattle investors.
“The Fed’s challenge is walking a tightrope,” said one market strategist. “They want to provide support to the economy without reigniting inflation.”
With stocks priced for optimism, Wednesday’s announcement will set the tone not only for markets but for the broader economic narrative heading into 2026.
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