NEW YORK (AP) — U.S. stocks bounced around their record levels on Wednesday after the Federal Reserve made moves to boost the job market but also warned that more help isn’t guaranteed.
The S&P 500 finished virtually flat, edging down by less than 0.1%. The Dow Jones Industrial Average dipped 73 points, or 0.2%, while the Nasdaq composite rose 0.5%. All three indexes were coming off all-time highs.
Stocks had been on track for modest gains in the afternoon after the Fed cut its main interest rate for the second time this year in hopes of helping the slowing job market. However, the market snapped lower after Fed Chair Jerome Powell later warned that it “is not a foregone conclusion” that the Fed will cut again in December at its next meeting — “far from it.”
“That needs to be taken off the board,” Powell said.
The warning hit Wall Street because traders had seen a cut in December as a near certainty, along with potentially more rate cuts in 2026. They had already driven stock prices to record highs in part because of those expectations.
Powell also noted that officials had “strongly differing views about how to proceed in December.” Even Wednesday’s decision to cut came with less consensus than expected: one member of the Fed’s committee, Jeffrey Schmid, voted to keep the federal funds rate steady instead of lowering it.
Meanwhile, the deluge of earnings reports from big U.S. companies continued, highlighting how the frenzy in artificial intelligence (AI) technology is fueling growth.
The pressure is on companies to deliver strong earnings gains as a means to quiet criticism that their stock prices have surged too high.
Teradyne soared 20.5% for the biggest gain in the S&P 500 after the maker of automated test equipment and advanced robotics systems reported stronger profits than analysts expected for the latest quarter. CEO Greg Smith credited the strength to AI-related applications, saying “AI-related test demand remains robust.”
Nvidia climbed 3%, continuing to benefit from the AI boom. The company became the first on Wall Street to reach a $5 trillion valuation just three months after breaking the $4 trillion barrier.
Even Caterpillar, known for its construction and mining equipment, is feeling a boost from AI. The company rallied 11.6% after reporting stronger profits and revenue for the latest quarter than analysts expected. Caterpillar’s strongest growth came from its business supplying equipment for big data centers powering AI.
On the losing side was Fiserv, which plunged 44% in its worst day since its stock began trading in 1986. The payments and financial technology company reported weaker profits than expected, slashed its profit forecast for the year, and revamped its board of directors and leadership team.
Mondelez International fell 3.9% despite reporting stronger results than analysts expected. The company, whose brands include Oreo cookies and Toblerone chocolate, has been dealing with sharp increases in cocoa costs. It expects challenging conditions to persist in some markets but hopes price increases for cocoa are moderating.
All told, the S&P 500 edged down by 0.30 points to 6,890.59. The Dow Jones Industrial Average fell 74.37 points to 47,632.00, while the Nasdaq composite rose 130.98 points to 23,958.47.
Overseas, stock markets were mixed in Europe following stronger finishes in Asia. Tokyo’s Nikkei 225 jumped 2.2% to another record, while Seoul’s Kospi rose 1.8% to its own all-time high after President Donald Trump met with South Korea’s leader following his visit to Japan. Stocks rose 0.7% in Shanghai ahead of a meeting between Trump and China’s leader, Xi Jinping.
The world’s two largest economies remain locked in an escalating trade war, with Washington imposing high tariffs and tightened technology controls, and China retaliating with curbs on rare earth shipments — a key source of leverage.
In the bond market, the yield on the 10-year Treasury rose to 4.07% from 3.99% late Tuesday as traders pared bets on an upcoming rate cut in December. The Fed has warned it may need to halt cuts if inflation accelerates beyond its still-high level, since lower rates can worsen inflation.
Adding to the challenge for Fed officials is the U.S. government shutdown, which has delayed important economic updates that would normally help guide the Fed’s decision-making process.
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