Dow Jones, S&P 500, and Nasdaq Post Gains as Fed Holds Rates; Middle East Tensions Linger
NEW YORK: Major U.S. stock indices posted modest gains Wednesday as investors digested the Federal Reserve’s decision to hold interest rates steady while monitoring escalating tensions in the Middle East.
The Dow Jones Industrial Average rose 0.34%, or 132 points, to close at 42,338.95, led by strong performances in financial and industrial stocks. The S&P 500 and Nasdaq Composite also climbed 0.34%, settling at 6,003.13 and 21,792.32, respectively.
Dow Jones Industrial Average (DJI)
| Level | Change | % Change |
| 42,338.95 | +132.00 | +0.34% |
Top Performers:
- Goldman Sachs Group (+1.99%)
- JPMorgan Chase (+1.90%)
- Cisco Systems (+1.16%)
- Caterpillar (+1.12%)
- Merck & Co (+1.10%)
Worst Performers:
- Visa (A) (-3.35%)
- Salesforce (-1.56%)
- Boeing (-1.19%)
- McDonald’s (-1.17%)
- Johnson & Johnson (-0.64%)
Nasdaq-100 (NDX)
| Level | Change | % Change |
| 21,792.32 | +74.00 | +0.34% |
Top Performers:
- Marvell Technology (+6.14%)
- Datadog (A) (+3.65%)
- Intel (+2.53%)
- Tesla (+2.27%)
- Analog Devices (+1.87%)
Worst Performers:
- AppLovin (A) (-5.42%)
- PayPal (-3.40%)
- Fortinet (-2.38%)
- Diamondback Energy (-2.22%)
- Lululemon Athletica (-2.10%)
S&P 500 (GSPC)
| Level | Change | % Change |
| 6,003.13 | +20.00 | +0.34% |
Top Performers:
- Coinbase (+14.58%)
- TKO Group Holdings (A) (+5.36%)
- Jabil (+4.10%)
- Caesars Entertainment (+4.03%)
- Super Micro Computer (+3.49%)
Worst Performers:
- Paycom Software (-3.94%)
- Mastercard (A) (-3.86%)
- PayPal (-3.40%)
- Visa (A) (-3.35%)
- Zoetis (A) (-3.25%)
Fed Holds Rates, Signals Caution on Inflation
The Federal Reserve kept its benchmark interest rate unchanged at 4.25%-4.5%, marking the seventh consecutive pause since December 2024. While policymakers projected two potential rate cuts later this year, they also lowered their 2025 GDP growth forecast to 1.4% and raised the core inflation outlook to 3.1%, signaling concerns over stagflation risks.
Fed Chair Jerome Powell acknowledged that Trump-era tariffs were contributing to inflationary pressures but emphasized patience before further policy adjustments.
“The size of the tariff effects, their duration, and the time it will take are all highly uncertain,” Powell said. “That is why we think the appropriate thing to do is to hold where we are as we learn more.”
Middle East Tensions Loom Over Markets
Despite the Fed’s cautious stance, geopolitical risks remained in focus as tensions between Israel and Iran intensified. Former President Donald Trump struck a confrontational tone, refusing to rule out U.S. military involvement.
“Nobody knows what I’m going to do,” Trump told reporters when asked about potential strikes on Iran. The U.S. has continued supporting Israel’s retaliatory strikes, which have reportedly damaged Iran’s military infrastructure.
Iran’s Supreme Leader Ayatollah Ali Khamenei vowed retaliation, warning that the U.S. would face “irreparable damage” if it intervened. Meanwhile, mediators Qatar and Oman pushed for a ceasefire, urging Israel to de-escalate.
Oil prices fluctuated amid the uncertainty, though markets appeared to downplay immediate risks.
“The market just seems very keen to fade geopolitical risk,” said Zachary Hill, head of portfolio management at Horizon Investments. “That has been historically the right thing to do, so I think that’s kind of what’s driving us so far today.”
Looking Ahead
Investors will now turn to upcoming economic data, including jobless claims and manufacturing figures, for further clues on the Fed’s next move. Meanwhile, the Middle East conflict and tariff-related inflation risks remain key wildcards for global markets.