On Wednesday, the U.S. benchmark equity indexes experienced a downturn following the Federal Reserve's decision to ease monetary policy by reducing interest rates by 50 basis points. This pivotal move has implications for investors and the broader economy. The Dow Jones Industrial Average, the S&P 500, and the Nasdaq Composite all recorded a decrease of 0.3%.
Specifically, the Dow closed at 41,503.1, the S&P 500 at 5,618.3, and the Nasdaq concluded the session at 17,573.3. In sector performance, utilities witnessed the most significant drop, whereas energy stocks gained traction, while communication services remained relatively stable. The Federal Open Market Committee (FOMC) of the central bank adjusted interest rates to a target range of 4.75% to 5%.
This is a notable shift compared to a Bloomberg-conducted consensus which anticipated a range of 5% to 5.25%. Fed Chair Jerome Powell addressed the media after the meeting, stating, "This decision reflects our growing confidence that with an appropriate recalibration of our policy stance, we can maintain strength in the labor market amidst moderate growth and an inflation trajectory moving sustainably down to 2%." Moreover, the FOMC's revised Summary of Economic Projections indicated a reduction in the median outlook for the federal funds rate from 2024 through 2026.
In contrast, expectations for unemployment rates were adjusted upwards. Oxford Economics commented on this, suggesting the Federal Reserve is likely concerned about potential weakening in labor demand, which could introduce additional stress points in the labor market. In the bond market, the yield on U.S.
10-year Treasury securities rose by 6.9 basis points to 3.71%, while the two-year rate increased by 3.6 basis points to reach 3.63%. These shifts reflect changing investor sentiment in response to monetary policy changes and economic indicators. Turning to housing news, U.S. housing starts unexpectedly rose last month, showcasing robust growth, particularly in the single-family project segment.
This increase came amid double-digit sequential gains, as reported by government data. Additionally, a surge in weekly mortgage applications was observed in the U.S., attributed to the 30-year fixed rate for conforming loan balances dropping to its lowest level since September 2022, according to the Mortgage Bankers Association. In the commodities market, West Texas Intermediate crude oil experienced a decline of 1.5%, settling at $70.16 per barrel. In company-specific news, shares of Intel ($INTC) plunged by 3.3%, marking the steepest decline on both the Dow and the Nasdaq, and among the most significant drops on the S&P 500.
Despite reporting a two-year delay in the construction of its plants in eastern Germany as part of cost-saving measures, the chipmaker continues to express commitment to this project, as recent statements from German Chancellor Olaf Scholz indicate. Resmed ($RMD) faced the biggest fall on the S&P 500, dropping 5.1%, as Wolfe Research downgraded the stock from peer perform to underperform.
This move resonates with ongoing market pressures and investor sentiment. General Motors ($GM) announced that its electric vehicle customers will gain access to Tesla's ($TSLA) Supercharger network via a GM-approved adapter. This news positively impacted GM's stock, which climbed by 2.4%, placing it among the top performers on the S&P 500, while Tesla's shares decreased slightly by 0.3%. In contrast, Apple ($AAPL), the maker of iPhones, emerged as the top performer on the Dow, seeing an increase of 1.8%.
On the commodities front, gold prices fell by 0.3%, landing at $2,585.20 per troy ounce, while silver dropped by 1.9% to $30.4 per ounce. This fluctuation in precious metals underscores the interplay between market movements and investor strategies amid shifting economic conditions. Overall, these developments within the financial landscape reflect a complex interplay of federal monetary policy changes, market performance, and sector dynamics, emphasizing the importance for investors to remain vigilant and adaptable..