US close: Markets finish lower as Fed stands pat on rates

Losses were seen across the major indices on Wall Street at the close on Wednesday, despite the tech-heavy Nasdaq being earlier underpinned by solid results from Apple, as the Fed stood pat on interest rates.

The Dow Jones Industrial Average lost 0.72% to 23,924.98, the S&P 500 also fell 0.72% to 2,635.67, and the Nasdaq 100 slid 0.56% to 6,644.48.

Just after 1900 BST, the Federal Reserve confirmed it was keeping its interest rate targets unchanged in its latest policy statement, at between 1.5% and 1.75%.

That was a move widely expected by markets, after the Fed raised its rates in March for the sixth time since it slashed them during the global financial crisis.

The announcement on Wednesday was accompanied by little fanfare, with no press conference offered by chair Jay Powell, or any updated economic forecasts published.

“Information received since the Federal Open Market Committee met in March indicates that the labour market has continued to strengthen and that economic activity has been rising at a moderate rate,” said the central bank in its statement.

“Job gains have been strong, on average, in recent months, and the unemployment rate has stayed low.”

Notably, however, there was a change in the Fed’s choice of words surrounding inflation, indicating it was becoming more satisfied that inflation was moving towards its target of 2%.

“On a 12-month basis, both overall inflation and inflation for items other than food and energy have moved close to 2 percent,” the statement read.

In March, it told markets that inflation, also excluding food and energy, was continuing to run below 2% on a 12-month basis.

It comes after core personal consumption expenditures excluding food and energy - the Federal Reserve’s preferred inflation measure - reached 1.9% year-on-year for the month of March.

“The policy statement sends a clear message that the Fed does not intend to overreact to a rise in inflation above the ‘symmetric’ 2% target,” said analysts at Oxford Economics.

“In turn, the Fed officials do not want the bond market to overreact to the expected rise in inflation and price in an overly hawkish tightening path.

“The policy statement even played down the recent rise in market-based inflation measures, though we agree they remain low.”

Earlier, better-than-expected earnings from Apple after the market close on Tuesday provided some cheer, as the tech company posted a 16% jump in second-quarter revenue to just over $61bn and said it was returning another $100bn to shareholders.

“There was some relief overnight after Apple not only produced a strong set of sales and earnings but also released positive forward guidance,” said David Morrison, chief market analyst at GKFX.

“There had been fears that the company would caution a slowdown in iPhone sales going into the next quarter.”

Also earlier in the session, the ADP employment report showed that job gains in America's private sector slowed down last month.

The payroll consultancy's closely-followed gauge of private sector hiring revealed that companies in the US took on 204,000 new workers last month.

Although that was less than the 241,000 seen in the month before, it was slightly better than the 193,000 that economists had penciled-in.

On the corporate front, US shares in Humana lost 2.55% despite the health insurer having posted first quarter profit and revenue beats, as did cosmetics giant Estee Lauder; whose shares finished down 8.51%.

Pharmacy retailer CVS saw shares drop 3.17% after it reported a first-quarter profit beat and provided upbeat 2018 guidance, while brewer Molson Coors stumbled 12.87% on news its sales volumes were continuing to dry up.

Dow Jones - Risers

Apple Inc. (AAPL) $176.57 4.42%
General Electric Co. (GE) $14.18 0.93%
Home Depot Inc. (HD) $185.96 0.69%
Dowdupont Inc. (DWDP) $63.45 0.68%
Chevron Corp. (CVX) $125.47 0.49%
Nike Inc. (NKE) $68.26 0.23%
Exxon Mobil Corp. (XOM) $76.80 -0.19%
3M Co. (MMM) $194.50 -0.27%
United Technologies Corp. (UTX) $118.50 -0.39%
Caterpillar Inc. (CAT) $143.86 -0.39%

Dow Jones - Fallers

Verizon Communications Inc. (VZ) $47.75 -2.19%
Cisco Systems Inc. (CSCO) $43.86 -2.16%
Travelers Company Inc. (TRV) $128.32 -2.11%
Johnson & Johnson (JNJ) $123.50 -1.99%
Intel Corp. (INTC) $52.31 -1.91%
International Business Machines Corp. (IBM) $142.45 -1.76%
McDonald's Corp. (MCD) $160.68 -1.69%
Boeing Co. (BA) $324.19 -1.62%
Microsoft Corp. (MSFT) $93.51 -1.57%
Pfizer Inc. (PFE) $34.89 -1.44%

S&P 500 - Risers

Frontier Communications Co. (FTR) $10.38 27.36%
Tenet Healthcare Corp. (THC) $31.29 9.71%
Devon Energy Corp. (DVN) $38.23 5.61%
Centene Corp. (CNC) $114.24 5.03%
Garmin Ltd. (GRMN) $61.95 5.02%
Apple Inc. (AAPL) $176.57 4.42%
Marathon Petroleum Corporation (MPC) $75.84 4.03%
Spectra Energy Corp. (SE) $10.90 4.01%
Andeavor (ANDV) $138.62 3.82%
NiSource Inc. (NI) $25.38 3.51%

S&P 500 - Fallers

Unum Group (UNM) $39.78 -16.95%
Molson Coors Brewing Co. Class B (TAP) $60.64 -15.40%
Pitney Bowes Inc. (PBI) $9.01 -10.17%
Xerox Corp. (XRX) $29.39 -9.01%
CH Robinson Worldwide Inc (CHRW) $82.90 -8.55%
Estee Lauder Co. Inc. (EL) $132.56 -8.51%
Gilead Sciences Inc. (GILD) $66.88 -7.83%
Yum! Brands Inc. (YUM) $80.10 -7.43%
Newfield Exploration Co (NFX) $27.89 -7.28%
Verisk Analytics Inc. (VRSK) $100.00 -6.27%

Nasdaq 100 - Risers

Apple Inc. (AAPL) $176.57 4.42%
Automatic Data Processing Inc. (ADP) $122.06 2.74%
Facebook Inc. (FB) $176.07 1.27%
Xilinx Inc. (XLNX) $65.12 0.91%
Seagate Technology Plc (STX) $54.70 0.90%
Symantec Corp. (SYMC) $27.92 0.90%
Activision Blizzard Inc. (ATVI) $68.39 0.87%
Expedia Group Inc. (EXPE) $114.43 0.82%
Workday, Inc. (WDAY) $126.37 0.60%
Take-Two Interactive Software Inc. (TTWO) $104.88 0.56%

Nasdaq 100 - Fallers

Gilead Sciences Inc. (GILD) $66.88 -7.83%
Verisk Analytics Inc. (VRSK) $100.00 -6.27%
Mylan Inc. (MYL) $36.77 -5.18%
Monster Beverage Corp (MNST) $52.72 -4.49%
Biomarin Pharmaceutical Inc. (BMRN) $82.37 -4.40%
T-Mobile Us, Inc. (TMUS) $56.97 -4.14%
Paypal Holdings Inc (PYPL) $71.73 -4.12%
Western Digital Corp. (WDC) $76.77 -3.78%
Alexion Pharmaceuticals Inc. (ALXN) $114.24 -3.69%
Fiserv Inc. (FISV) $69.03 -3.63%