Dollar Rises, Stocks Face Headwinds From Fed Rates: Markets Wrap – Yahoo Finance
The US dollar rose against a basket of global currencies on Wednesday, while stocks faced headwinds from the Federal Reserve’s decision to keep interest rates unchanged.
The Fed’s decision to keep rates unchanged at near-zero levels was widely expected, but the central bank also indicated that it would not raise rates any time soon. This sent a signal to markets that the US economy is still in a fragile state and could be facing a slow recovery.
The dollar rose against the euro, the Japanese yen, and the British pound as investors sought a safe haven in the greenback. The euro fell to a one-week low of $1.1837, while the yen dropped to a two-week low of 103.73 against the dollar.
Meanwhile, stocks were mixed as investors weighed the Fed’s decision. The Dow Jones Industrial Average and the S&P 500 both ended the day lower, while the Nasdaq Composite closed slightly higher.
The Dow fell 0.2% to 28,823.77, while the S&P 500 dropped 0.4% to 3,523.55. The Nasdaq Composite, however, rose 0.1% to 11,890.17.
The tech-heavy Nasdaq was supported by a rally in big tech stocks such as Apple, Microsoft, and Amazon. Apple rose 1.7%, while Microsoft and Amazon both gained more than 1%.
Investors were also encouraged by news that the US government is close to reaching a deal on a new stimulus package. The package is expected to include more direct payments to individuals and businesses, as well as additional unemployment benefits.
Overall, the markets are in a wait-and-see mode as investors digest the Fed’s decision and look ahead to the US presidential election in November. With the US economy still in a fragile state, investors will be closely watching for any signs of a sustained recovery.