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

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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 comments poured cold water on traders hoping for a rate cut in September and at least another decrease before the year is out. Treasury yields jumped as Powell signaled it may take a bit to assess the effect of tariffs on consumer prices.

The central bank’s decision to keep rates the same was not unanimous, however, with Fed governors Michelle Bowman and Christopher Waller dissenting. Both were in favor of a quarter-point cut at the current policy meeting.

“Powell isn’t buckling under the political pressure to cut rates, so markets needed to reprice the overall level of the Fed Funds rate going out a few months,” said Jamie Cox, managing partner at Harris Financial Group. “The reaction function wasn’t that bad, largely because it’s clear where rates are headed, despite Powell’s current ability to enforce the wait and see.”

It was the second day of losses for Wall Street following a streak of six record closes for the S&P 500. Major averages started the day mostly in the green, encouraged by a better-than-expected GDP report that signaled to some that the economy was weathering higher tariff rates.

The post-Fed losses were led by consumer-focused stocks like Home Depot, which could benefit from lower rates.

Correction: An earlier version misstated the number of consecutive records the S&P 500 has had in recent days.

S&P closes lower

The S&P 500 closed lower on Wednesday and gave up its gain from earlier in the session after Federal Reserve Chair Jerome Powell threw some cold water on the prospects of a September rate cut.

The broad market index lost 0.12% to close at 6,362.90. The Nasdaq Composite added 0.15% to 21,129.67, while the Dow Jones Industrial Average fell 171.71 points, or 0.38%, to finish the session at 44,461.28.

— Brian Evans

Tariff effects on inflation still need to be seen, Powell says

The Fed can keep the interest rate steady while waiting to see if tariff policy pushes up inflation, 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,” Powell said.

Powell said a “reasonable base case” could be that effects to inflation will be “short lived.” But he also cautioned that levies could cause inflationary changes that are “more persistent.”

“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.

“For the time being, we’re well positioned to learn more about the likely course of the economy and the evolving balance of risks before adjusting our policy stance,” he added. “We see our current policy stance as appropriate to guard against inflation risks.”

— Alex Harring

Divided Fed keeps rates unchanged

The Fed kept monetary policy unchanged, as was widely expected. However, two central bank officials — Christopher Waller and Michelle Bowman — dissented in the decision, pushing for the Fed to cut the overnight rate by 0.25 percentage point.

This was the first time since 1993 that the Fed’s policy decision was met with so much dissent.

— Fred Imbert

Jobs report could trump Fed decision, says UBS

Investors are focusing on macro drivers right now, but they shouldn’t dismiss the Federal Reserve’s comments at the close of its meeting Wednesday, according to UBS.

“The common thinking in markets seems to be that the Jul employment report on 1 Aug could trump the rate decision in terms of market impact, as it will provide more timely information on the monetary policy outlook,” strategist Alvise Marino wrote in a note Wednesday.

“While we acknowledge this, we also think that how the FOMC today characterizes factors such as robust corporate earnings or the ongoing easing in financial conditions will matter for the market’s perception of the Fed’s independence,” he added.

President Donald Trump has been pushing Fed Chair Jerome Powell to cut rates, but the central bank is unlikely to do so right now.

“The risk we see is that any signals from the FOMC statement or from Chair Powell that are perceived as increasing the odds of a Sep cut could be interpreted as concessions to political pressure, given that the economic picture does not seem to clearly call for policy easing,” Marino said.

— Michelle Fox

Oppenheimer upgrades regional bank PNC to outperform

In a Wednesday note, Oppenheimer upgraded shares of regional bank PNC Financial Services Group to an outperform rating from perform.

Shares of PNC have added less than 1% this year. Oppenheimer’s $238 price target implies an upside of 23% ahead.

“The shares have lagged both the banks and the broader market in the past year, but we see PNC as a well-managed, high-quality and consistently profitable regional banking company,” wrote Oppenheimer analysts Chris Kotowski and John Coffey.

The analysts also like PNC from an industry backdrop at this point. Commercial banks make more sense than investment banks, which are still taking a hit from somewhat muted investment bank revenues, they said.

“We have two sets of themes that lead us to prefer the plain vanilla ‘coupon-clipping’ commercial banks to the more transactional investment banks at this juncture,” Kotowski and Coffey said. “We see the commercial banks benefiting from five little things that should allow them to generate double-digit earnings growth in the year ahead: fixed asset repricing should boost NII growth above loan growth, loan growth slowly improving, card losses peaking, buybacks accelerating as capital ratios have been built, and eking out productivity gains.”

Shares of PNC were trading marginally higher on Wednesday.

— Lisa Kailai Han

Buy the dip on PayPal as economics remain ‘attractive,’ analyst says

Investors should buy the dip in PayPal shares, which sold off far too much on the back of its second-quarter results, says Mizuho analyst Dan Dolev.

Dolev kept his outperform rating on PayPal and lowered his price target by $3 to $84, which implies 17.6% potential upside from the the stock’s latest close. Shares of the fintech company are down nearly 8% week to date and more than 16.5% year to date, with losses accelerating this week after PayPal on Tuesday reported slowing growth in transaction margin dollars.

“Our analysis, which triangulates into core PayPal button growth based on disclosures around other branded components like BNPL and Pay with Venmo, suggests that core branded growth actually improved relative to 1Q levels,” Dolev wrote in a note. “Plus, we remind investors that the BNPL/Pay with Venmo components of branded checkout come at attractive economics – we estimate that Pay with Venmo’s transaction margins can be ~1.5x that of companywide levels.”

— Pia Singh

Spotify is a buy after earnings miss, Deutsche Bank Research says

Investors should buy the dip after Spotify Technology‘s earnings miss, according to Deutsche Bank Research.

Shares of the music streaming service dropped more than 11% Tuesday, its worst day going back to July 2023, after Spotify’s results from its most recent quarter and current quarter guidance disappointed expectations.

Yet Benjamin Black, research analyst at Deutsche Bank Research, said the slide is an opportunity for investors. The company, which boasts robust engagement among users, will likely raise its prices before year end, a potential catalyst for the stock, he said.

“We see a buying opportunity here,” wrote Black, adding, “SPOT beat MAU and Premium subs expectations; engagement continues to be robust, and free-to-paid conversion is trending higher. This creates the opportunity for SPOT to lean into price increases that could include both music and non-music content (which have higher gross margins).”

— Sarah Min

Stocks open little changed

Stocks opened little changed on Wednesday, as investors await the Federal Reserve’s interest rate decision and more corporate earnings.

The S&P 500 inched up 0.09%, while the Nasdaq Composite added 0.2%. The Dow Jones Industrial Average was marginally higher.

— Brian Evans

Trump says India will pay 25% tariff plus penalty starting Friday

President Donald Trump said India will face a 25% tariff starting Friday due to their trade barriers.

“Remember, while India is our friend, we have, over the years, done relatively little business with them because their Tariffs are far too high, among the highest in the World, and they have the most strenuous and obnoxious non-monetary Trade Barriers of any Country,” Trump said on Truth Social.

India will also face a penalty for buying Russian weapons and energy, Trump said, without providing detail.

— Spencer Kimball

U.S. economy grows more than expected in Q2

The U.S. economy expanded at a faster-than-expected pace during the second quarter of the year thanks in part to strong consumer spending. GDP grew by 3%, while economists polled by Dow Jones expected a 2.3% increase.

The resiliency comes even as the Trump administration moves forward with its tariff plans.

— Fred Imbert

Starbucks, Peloton, Novo Nordisk among stocks making biggest premarket moves

Check out the companies making headlines before the bell.

• Starbucks — The coffee chain jumped more than 4% after CEO Brian Niccol said the company’s turnaround plan was ahead of schedule. On top of that, Starbucks reported fiscal third-quarter revenue of $9.5 billion, beating an LSEG consensus estimate of $9.31 billion.
• Peloton — The exercise equipment maker jumped nearly 7% after UBS upgraded shares to buy from neutral and signaled the stock could nearly double from current levels.
• Novo Nordisk — Shares of the Danish pharmaceutical giant slid almost 4%, extending its double-digit slide on Tuesday after the company cut its full-year guidance, citing weaker second-half U.S. sales growth expectations for its blockbuster Wegovy obesity drug. Novo Nordisk also announced a new CEO in an attempt to revive falling sales and tackle increasing competition. Bank of America downgraded the stock to neutral.

For the full list, read here.

— Pia Singh

Private payrolls bounce back

Private companies hired at a greater-than-expected pace in July and reversed a loss of 23,000 jobs from a month earlier, ADP said on Wednesday.

Payrolls at private companies rose by a seasonally adjusted 104,000 in July, while economists polled by Dow Jones forecast an increase of 64,000.

— Brian Evans

Tariff deadline on Friday ‘will not be extended,’ Trump says

President Donald Trump on Wednesday said that his Friday deadline for so-called “reciprocal” tariffs will not be extended.

“THE AUGUST FIRST DEADLINE IS THE AUGUST FIRST DEADLINE — IT STANDS STRONG, AND WILL NOT BE EXTENDED. A BIG DAY FOR AMERICA!!!” Trump wrote in a Truth Social post.

— Brian Evans

Adidas stock slips as company points to U.S. tariff hit

Shares of German sportswear behemoth Adidas pulled back more than 7% on Wednesday after the firm said President Donald Trump’s tariffs could result in 200 million euros ($231 million) worth of added costs in the second half of of the year.

“The price increases, if any, will only be in the U.S.,” CEO Bjørn Gulden said on the company’s second-quarter earnings call.

Adidas has not yet instituted any price increases as a result of tariffs, the company said.

“What we can say is we will not be the price leaders. We will move slowly and see what is happening in the market,” Gulden said.

— Brian Evans

Humana pops on earnings beat

Humana shares jumped about 5% after the insurance giant reported better-than-expected second-quarter earnings.

The company earned an adjusted $6.27 per share on revenue of $32.39 billion. Analysts expected a profit of $5.92 per share on revenue of $31.89 billion, according to LSEG. Humana also raised its full-year earnings and revenue guidance.

— Fred Imbert

Caesars shares fall on surprise second-quarter loss

Shares of Caesars Entertainment fell more than 1% in the premarket after the company reported a surprise loss for the second quarter. The casino operator lost 39 cents per share, while analysts polled by LSEG expected a profit of 5 cents per share. Revenue of $2.91 billion did beat a consensus forecast of $2.86 billion.

U.S. stocks will continue to ‘power ahead,’ Capital Economics says

“It’s increasingly looking as though the S&P 500 will continue to power ahead,” Capital Economics head of markets for Asia/Pacific Thomas Mathews wrote Tuesday.

“The glass is increasingly looking half full to us,” said the London-based Mathews. “With the worst of the risks around trade seemingly fading, we suspect there are fewer remaining obstacles to further investor enthusiasm for AI and its implications for U.S. companies. So, we suspect expectations for earnings and valuations could rise further, perhaps quite a bit for the ‘tech’ sectors, even if that meant the rally narrowed further,” Capital Economics wrote.

The researcher acknowledged that its 6,250 end of 2025 forecast for the S&P “might be a bit too pessimistic,” while its end of 2026 forecast of 7,000 “seems as though it could plausibly come a bit sooner than we had anticipated. Of course, there’s still a fair amount of remaining uncertainty, not least around the U.S.-China negotiations and how it all feeds through to the U.S. and global economies.”

The broad-based nature of the recent rally in stocks is also cause for optimism, Mathews said. “Although IT and industrials have clearly led the way,” six of the 11 main sectors in the S&P 500 are higher now than they were at the prior market top in February, and two others are very close. “Most have seen upward revisions to earnings expectations, too.”

— Scott Schnipper

See the stocks moving in extended trading

These are some of the stocks making notable moves in after-hour trading:

• Starbucks — The coffee chain’s shares added 3% in extended trading after revenue for the fiscal third quarter came in higher than expected. Starbucks posted revenue of $9.46 billion, while LSEG consensus estimates called for $9.31 billion. Same-store sales fell for the sixth consecutive quarter, however.
• Visa — Shares fell 3%. Visa reaffirmed full-year 2025 guidance of low double-digit net revenue growth. Separately, the financial technology company beat expectations on the top and bottom lines in the fiscal third quarter. Visa posted adjusted earnings $2.98 per share on revenue of $10.17 billion, while analysts polled by LSEG forecast $2.85 per share and $9.84 billion in revenue.
• Mondelez International — The manufacturer of Oreo cookies and Sour Patch Kids candy saw shares tumble nearly 3%. Mondelez reaffirmed its full-year guidance, calling for a 10% decline year over year in earnings per share on constant currency and organic revenue growth of about 5%. Separately, second-quarter results surpassed Wall Street estimates.

Click here for the full story.

— Alex Harring

Stock futures are near flat

Stock futures tied to the Dow, S&P 500 and Nasdaq 100 were all little changed shortly after 6 p.m. ET.

— Alex Harring