S&P 500 closes lower, Dow drops more than 150 points as Powell signals Fed isn’t ready to cut rates

The S&P 500 gave up earlier gains and closed lower on Wednesday after Federal Reserve Chair Jerome Powell signaled the central bank isn’t ready to cut rates, as it assesses the impact of President Donald Trump’s higher tariffs on the inflation picture.

The broad market index slipped 0.12% and closed at 6,362.90. The Dow Jones Industrial Average fell 171.71 points, or 0.38%, closing at 44,461.28. The Nasdaq Composite gained 0.15% and ended at 21,129.67. At their session highs, the S&P 500 was up by as much as 0.4%, while the Dow was up 0.2%.

Investors parsed Powell’s comments at a press conference for insights into the Fed’s next move — after it didn’t budge on rates following its July meeting. Powell said that the central bank has “made no decisions” about a potential policy change in September.

“Our obligation is to keep longer-term inflation expectations well anchored and to prevent a one-time increase in the price level from becoming an ongoing inflation problem,” Powell said. “Higher tariffs have begun to show through more clearly to prices of some goods, but their overall effects on economic activity and inflation remain to be seen.”

The S&P 500 gave up earlier gains and closed lower on Wednesday after Federal Reserve Chair Jerome Powell signaled the central bank isn’t ready to cut rates, as it assesses the impact of President Donald Trump’s higher tariffs on the inflation picture.

The broad market index slipped 0.12% and closed at 6,362.90. The Dow Jones Industrial Average fell 171.71 points, or 0.38%, closing at 44,461.28. The Nasdaq Composite gained 0.15% and ended at 21,129.67. At their session highs, the S&P 500 was up by as much as 0.4%, while the Dow was up 0.2%.

Investors parsed Powell’s comments at a press conference for insights into the Fed’s next move — after it didn’t budge on rates following its July meeting. Powell said that the central bank has “made no decisions” about a potential policy change in September.

“Our obligation is to keep longer-term inflation expectations well anchored and to prevent a one-time increase in the price level from becoming an ongoing inflation problem,” Powell said. “Higher tariffs have begun to show through more clearly to prices of some goods, but their overall effects on economic activity and inflation remain to be seen.”