US stocks end mostly lower as Fed pledges to keep rates low

Stacey Cunningham, president of the New York Stock Exchange, rings the opening bell as Snowflake makes its public debut.
Stacey Cunningham, president of the New York Stock Exchange, rings the opening bell as Snowflake makes its public debut.PHOTO: NYTIMES

NEW YORK (AFP) - Wall Street stocks finished mostly lower after a volatile session mostly on Wednesday (Sept 16) as the Federal Reserve kept interest rates low and offered a cautious outlook on the economy.

The Dow Jones Industrial Average gained 0.1 per cent to close at 28,032.38.

But the broad-based S&P 500 fell 0.5 per cent to end the session at 3,385.49, while the Nasdaq Composite Index dropped 1.2 per cent to 11,050.47, extending a period of weakness for tech companies and reversing a two-day rally.

The Fed pledged to keep low interest rates low until it has achieved its goal of maximum employment as central bankers offered a somewhat better forecast for 2020, but a more modest outlook for 2021 and 2022.

But Fed chairman Jerome Powell stressed the need for more stimulus from Washington, noting 11 million people are still out of work due to the pandemic.

"My sense is that more fiscal support is likely to be needed," Powell said, noting that aid approved in March was an "essential" factor in the better-than-expected recovery so far.

Talks in Washington have stalled in a partisan dispute on Capitol Hill, but there were signs Wednesday of possible movement, as the White House has balked at what officials say is the unrealistically high price tag demanded by Democrats.

But US President Donald Trump on Twitter urged Republicans in Congress "go for the much higher numbers," without specifying what he meant.

Economic data released prior to the Fed announcement was mixed, with August retail sales rising less than expected, but a survey pointing to strong homebuilder sentiment.


Among individual companies, FedEx shot up 5.8 per cent after reporting better-than-expected first-quarter profits following a 13 per cent jump in revenues to US$19.3 billion (S$26 billion) in a report that reflected strong demand during the pandemic.

Shares of cloud data warehouse startup Snowflake more than doubled from its opening price in its premier trading session on the Nasdaq after an initial public offering raised US$3.4 billion.