Wall Street closes lower after Fed holds rates steady

Wall Street experienced a downturn on Wednesday, with its primary indicator, the Dow Jones Industrial Average, shedding 0.98% after the Federal Reserve announced it would keep interest rates unchanged. The session concluded with the Dow Jones down 507 points at 51,492. The S&P 500 also saw a decline, losing 1.21% to close at 7,420 points, while the tech-heavy Nasdaq dropped 1.34% to 26,021 units.

The Federal Reserve's decision to maintain the current interest rate range of 3.5% to 3.75% came during the first meeting presided over by new chairman Kevin Warsh. This move occurred despite an annual inflation rate of 4.2% reported for May. The Board of Governors unanimously agreed to hold the benchmark interest rate steady.

Economic projections released by the Fed indicated a potential shift in monetary policy. The report revealed that only one of the 18 members favored a rate cut, while three suggested a hike to between 3.75% and 4% by year-end. Five members even anticipated rates exceeding 4% within 2026. This outlook gained traction following President Donald Trump's nomination of Warsh, who he expected to pursue more accommodative policies, a departure from his criticism of former chair Jerome Powell.

In other market movements, SpaceX shares fell 4.95% after a period of gains following its initial public offering. The price of West Texas Intermediate (WTI) crude oil rose 1%, reaching $76.79 per barrel, influenced by reports of a peace agreement between the United States and Iran that would end their conflict and open the Strait of Hormuz, though nuclear program negotiations remain pending. President Trump issued a warning to Iran, stating the agreement was not final and that the U.S. would retaliate with force if Iran did not comply.

Safe-haven assets saw declines, with gold dropping 2.22% to $4,257 per ounce and silver falling 3.83% to $67.33. Yields on 10-year Treasury bonds increased by 5.4 basis points, reaching 4.499%.