U.S. stocks sink as Fed hints no hurry to cut rates

A trader works on the floor of the New York Stock Exchange in New York, the United States, on Jan. 31, 2024. U.S. stocks ended lower on Wednesday. The Dow Jones Industrial Average fell 317.01 points, or 0.82 percent, to 38,150.3. The S&P 500 sank 79.32 points, or 1.61 percent, to 4,845.65. The Nasdaq Composite Index shed 345.89 points, or 2.23 percent, to 15,164.01. (Photo by Michael Nagle/Xinhua)

NEW YORK, Jan. 31 (Xinhua) -- U.S. stocks ended lower on Wednesday, on the central bank's anticipated decision to hold rates steady, and Fed Chair Jerome Powell's hint that the central bank would not begin cutting rates at its next meeting in March.

The Dow Jones Industrial Average fell 317.01 points, or 0.82 percent, to 38,150.3. The S&P 500 sank 79.32 points, or 1.61 percent, to 4,845.65. The Nasdaq Composite Index shed 345.89 points, or 2.23 percent, to 15,164.01, as disappointing earnings from Alphabet, Microsoft, and AMD weighed on the market, while Tesla dipped further after a legal setback for Elon Musk's hefty pay package.

All the 11 primary S&P 500 sectors ended in red, with communication services and technology leading the laggards by dropping 3.93 percent and 2.11 percent, respectively. Health posted the weakest decline, down 0.11 percent.

Fed policymakers have kept their benchmark interest rate between 5.25 percent to 5.5 percent as expected, but they dropped its previous hint of future rate increases, signaling a possible change in course. Instead, it emphasized stability in inflation and employment, implying a cautious and data-driven approach to future policy decisions.

However, the policy statement said that "the Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent."

"Based on the meeting today, I would tell you that I don't think it's likely that the committee will reach a level of confidence by the time of the March meeting to identify March as the time to do that. But that's to be seen," Powell said.

After Powell's speech, markets were pricing in a roughly 36 percent odds of a rate cut on March 20, sharply down from 56 percent earlier Wednesday afternoon. There will likely be only one more reading of personal consumption expenditures (PCE) before the Fed's March meeting.

A trader works on the floor of the New York Stock Exchange in New York, the United States, on Jan. 31, 2024. U.S. stocks ended lower on Wednesday. The Dow Jones Industrial Average fell 317.01 points, or 0.82 percent, to 38,150.3. The S&P 500 sank 79.32 points, or 1.61 percent, to 4,845.65. The Nasdaq Composite Index shed 345.89 points, or 2.23 percent, to 15,164.01. (Photo by Michael Nagle/Xinhua)

A trader works on the floor of the New York Stock Exchange in New York, the United States, on Jan. 31, 2024. U.S. stocks ended lower on Wednesday. The Dow Jones Industrial Average fell 317.01 points, or 0.82 percent, to 38,150.3. The S&P 500 sank 79.32 points, or 1.61 percent, to 4,845.65. The Nasdaq Composite Index shed 345.89 points, or 2.23 percent, to 15,164.01. (Photo by Michael Nagle/Xinhua)

Traders work on the floor of the New York Stock Exchange in New York, the United States, on Jan. 31, 2024. U.S. stocks ended lower on Wednesday. The Dow Jones Industrial Average fell 317.01 points, or 0.82 percent, to 38,150.3. The S&P 500 sank 79.32 points, or 1.61 percent, to 4,845.65. The Nasdaq Composite Index shed 345.89 points, or 2.23 percent, to 15,164.01. (Photo by Michael Nagle/Xinhua)

Traders work on the floor of the New York Stock Exchange in New York, the United States, on Jan. 31, 2024. U.S. stocks ended lower on Wednesday. The Dow Jones Industrial Average fell 317.01 points, or 0.82 percent, to 38,150.3. The S&P 500 sank 79.32 points, or 1.61 percent, to 4,845.65. The Nasdaq Composite Index shed 345.89 points, or 2.23 percent, to 15,164.01. (Photo by Michael Nagle/Xinhua)

Traders work on the floor of the New York Stock Exchange in New York, the United States, on Jan. 31, 2024. U.S. stocks ended lower on Wednesday. The Dow Jones Industrial Average fell 317.01 points, or 0.82 percent, to 38,150.3. The S&P 500 sank 79.32 points, or 1.61 percent, to 4,845.65. The Nasdaq Composite Index shed 345.89 points, or 2.23 percent, to 15,164.01. (Photo by Michael Nagle/Xinhua)

Traders work on the floor of the New York Stock Exchange in New York, the United States, on Jan. 31, 2024. U.S. stocks ended lower on Wednesday. The Dow Jones Industrial Average fell 317.01 points, or 0.82 percent, to 38,150.3. The S&P 500 sank 79.32 points, or 1.61 percent, to 4,845.65. The Nasdaq Composite Index shed 345.89 points, or 2.23 percent, to 15,164.01. (Photo by Michael Nagle/Xinhua)

Traders work on the floor of the New York Stock Exchange in New York, the United States, on Jan. 31, 2024. U.S. stocks ended lower on Wednesday. The Dow Jones Industrial Average fell 317.01 points, or 0.82 percent, to 38,150.3. The S&P 500 sank 79.32 points, or 1.61 percent, to 4,845.65. The Nasdaq Composite Index shed 345.89 points, or 2.23 percent, to 15,164.01. (Photo by Michael Nagle/Xinhua)