The S&P 500 ended nearly flat on Wednesday, giving back earlier gains after Federal Reserve Chair Jerome Powell said inflation in goods prices is expected to go up over the summer as President Donald Trump's tariffs work their way to consumers.
Market Snapshot
The Dow Jones Industrial Average fell 44.14 points, or 0.10%, to 42,171.66, the S&P 500 lost 1.85 points, or 0.03%, to 5,980.87 and the Nasdaq Composite rose 25.18 points, or 0.13%, to 19,546.27.
Market Movers
Stablecoin issuer Circle Internet Group soared 33.8% while Coinbase rallied 16.3% after the Senate passed a bill to regulate stablecoins, called the Genius Act. Stablecoins most often are pegged to the dollar and backed by reserves.
Tesla rose 1.8%. Shares of the electric-vehicle maker tumbled 3.9% on Tuesday after ending Monday's session up 1.2% and closing up 1.9% on Friday. Tesla stock has wavered ahead of the company's expected robo-taxi launch this weekend, as investors balance high expectations with recent weak sales.
Marvell Technology gained 7% after the chip designer raised its forecast for the market for custom artificial-intelligence chips. During a webinar, Marvell raised expectations for its total addressable market in the custom AI processor business to $55 billion in 2028 from $43 billion.
Other chip stocks also rallied on Wednesday. Intel, SMCI rose over 3%; Micron rose 1.2%; Nvidia rose 0.9%.
Sunrun rose 6%. The provider of solar and battery-storage systems sank 40% on Tuesday after revisions made by Senate Republicans to the House's tax-and-spending bill included a phaseout of solar, wind, and energy tax credits by 2028. The double-digit decline was Sunrun's largest single-day percentage decrease on record, according to Dow Jones Market Data. Sunrun was downgraded to Sector Perform from Outperform at RBC Capital.
Shares of Enphase Energy and SolarEdge Technologies traded higher on Wednesday after plunging in the previous session.
Nucor was up 3.3% after the largest steelmaker in the U.S. issued a second-quarter earnings forecast that exceeded analysts' forecasts. Nucor expects earnings in the range of $2.55 to $2.65 a share for the quarter ending July 5. Wall Street anticipates earnings of $2.36. The company reports second-quarter earnings on July 28.
Steel Dynamics, however, issued a gloomier second-quarter outlook. The company expects earnings of $2 to $2.04 a share, well below analysts' consensus call for earnings of $2.73. Shares fell 2.3%.
Korn Ferry jumped 6.5%. The consulting company posted fiscal fourth-quarter adjusted earnings of $1.32 a share, topping Wall Street estimates of $1.26, as total revenue increased 2.8% to $719.8 million. Fee revenue rose to $712 million from $690.8 million.
GMS Inc. surged 10.6% after the building-products distributor posted fiscal fourth-quarter adjusted earnings that topped analysts' estimates. Sales sank 5.6% to $1.33 billion. "The ongoing challenging interest rate environment and general market uncertainty continues to be a headwind for the business, contributing to reduced levels of activity in each of our major end markets," GMS said in a statement.
Market News
Fed Keeps Rates Unchanged, Sees Two Cuts in 2025 but Less Easing in Later Years
The Federal Reserve held interest rates steady on Wednesday and policymakers signaled borrowing costs are still likely to fall this year, but slowed the overall pace of expected future rate cuts in the face of estimated higher inflation flowing from the Trump administration's tariff plans.
In new economic projections, policymakers sketched a modestly stagflationary picture of the U.S. economy, with economic growth slowing to 1.4% this year, unemployment rising to 4.5% by the end of this year, and inflation finishing 2025 at 3%, well above the current level.
While policymakers still anticipate cutting rates by half a percentage point this year, as they projected in March and December, they slightly slowed the pace from there to a single quarter-percentage-point cut in each of 2026 and 2027 in a protracted fight to return inflation to the central bank's 2% target.
Fed’s Powell Says Rate Path Unclear But Tariff Impact Is Coming
There are a lot of unknowns about the outlook for the economy and interest rates, but Federal Reserve Chair Jerome Powell signaled at least one thing seems certain: Higher prices are coming.
Policymakers voted unanimously to hold interest rates steady for a fourth straight meeting Wednesday as they await clarity on whether tariffs will leave a one-time or more lasting mark on inflation. Powell said it’s still unclear how much of the bill will fall on the shoulders of consumers, but he expects to learn more about tariffs this summer.
“Ultimately the cost of the tariff has to be paid, and some of it will fall on the end consumer,” Powell said. “We know that’s coming, and we just want to see a little bit of that before we make judgments prematurely.”
