The main US stock market indices opened in the red on Wednesday ahead of the Federal Reserve's rate cut decision. Government's producer price index data also stirred inflation fears as prices accelerated unexpectedly.
S&P 500 opened 0.33% lower at 6,693.61, erasing previous day's gains. Similarly, tech-heavy Nasdaq Composite opened 0.37% lower at 22,396.32 and Dow Jones Industrial Average ticked 0.36% lower to 46,825.16.
Dow Jones slumped nearly 1%, shedding over 400 points to trade at 46,570.64 within one hour of market open. Losses in big tech weighed on the Nasdaq index which slipped over 0.7% to 22,317 and S&P 500 declined 0.7% to 6,670.15.
The US Federal Reserve is set to announce its interest rate later in the day after a two-day Federal Open Market Committee (FOMC) meeting amid the ongoing geopolitical tensions with Iran.
The upcoming interest rate verdict will be the second last policy review for Jerome Powell before his term as Fed Chairman ends on May 15, 2026. The Federal Open Market Committee (FOMC) had cut the federal funds rate by a quarter-point twice last year to 3.75%-4.00%.
However, the US-Israel-Iran war, now in its third week running, has roiled the policy outlook for US Fed policymakers. The war, that has stranded a fifth of global oil supply, has triggered fresh signs of labor weakness for the US economy. Crude oil-driven inflation concerns are cornering Powell-led rate-setting panel into an uncomfortable choice — leave the benchmark borrowing costs steady to ensure that inflation does not worsen or decrease them to shore up a job market that is losing ground.
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After the market opened, only three out of the 11 sectoral indices traded in the green while eight traded lower. Consumer Discretionary and Healthcare sectors led the decline while Energy and Industrial sectors led the gains.
Crude oil prices ticked higher with the West Texas Intermediate rising nearly 3% to $98.16 a barrel. Global benchmark Brent Crude rose as high as 5% to $108.87 per barrel.
The magnificent seven stocks traded mixed with Nvidia Corp. up 0.6% to $183.04, Apple Inc. ticking 0.3% lower to trade at $253.40, Meta Platforms Inc. traded 0.22% lower at $620.64, and Microsoft Corp. was down 0.74% to $396.47.
Amazon.com Inc. also slumped over 1% to $213, while Tesla Inc. traded 0.22% higher at $400.02. Google-parent Alphabet Inc.'s stock slipped 0.33% to $310.12.
Spot Gold prices slipped 2.72% to $4,868.85 an ounce ahead of the key rate cut decision.
ALSO READ: US Fed Meeting March 2026: Date, Time, What To Expect And Where To Watch Jerome Powell's Speech Live
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