LIVE MARKETS-US stocks take solace in a Fed that stayed steady

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U.S. STOCKS TAKE SOLACE IN A FED THAT STAYED STEADY

The Federal Reserve held interest rates steady on Wednesday, as expected, but U.S. central bank policymakers indicated they still anticipate reducing borrowing costs by half a percentage point by the end of this year in the context of slowing economic growth and, eventually, a downturn in inflation.

The Fed also said it will slow the ongoing drawdown of its balance sheet, known as quantitative tightening, starting next month. Powell said Wednesday that the slowing pace makes sense amid some rising signs of tightness in money market conditions.

With this, stocks strengthened, and yields dipped.

The S&P 500 index .SPX, which was up around 0.4% in the moments before the release of the FOMC statement at 2 p.m. EDT, was up around 0.8% just before Powell took the podium at 2:30 p.m. By close, it finished with a gain of about 1.1% on the day.

All S&P 500 sectors strengthened over the last two hours of the trading day, led by consumer discretionary .SPLRCD, and all ultimately finished green on the day.

Big banks .SPXBK, the Mag 7 MAGS.K, and FANGs .NYFANG, were among the day's outperformers.

Of note, the CBOE volatility index .VIX ended below the 20.00 level for the first time since February 28.

"The market was primarily looking for anything that reduced the uncertainty, and I think simply that Powell was kind of maintaining the outlook there," said Russell Price, chief economist at Ameriprise Financial in Troy, Michigan.

Price added "Inflation expectations went up just a little bit, and their GDP numbers came down just a little bit, so the market's taking it as the Fed did not add to the overall uncertainty background that is currently pressuring stocks."

Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey, said:

"Investors have been on edge as the tariff policies continue to be announced and the economy shows some signs of slowing. Powell seemed to indicate that the Fed saw conditions as still on a good path."

Here is a snapshot of where markets stood just shortly after 4 p.m. EDT:

(Terence Gabriel, Chuck Mikolajczak, Sinéad Carew)

FOR WEDNESDAY'S EARLIER LIVE MARKETS POSTS:

FED PROJECTS TWO RATE CUTS THIS YEAR, STOCKS STRENGTHEN - CLICK HERE

A BRIEF HISTORY OF SHORTS, CORRECTIONS AND WHAT CAME NEXT - CLICK HERE

FOMC PREVIEW: WILL THERE BE DOTING OVER THE DOTS? - CLICK HERE

TWO FOR THE SEESAW: MORTGAGE RATES GAIN HEAT, DEMAND FALLS - CLICK HERE

FOREIGN OWNERSHIP OF US STOCKS - A RISK FOR WALL ST? - CLICK HERE

NOTHING NEW HERE AS NVIDIA REITERATES AI ROADMAP - CLICK HERE

WALL STREET TRIES FOR A REBOUND AS IT WAITS ON THE FED - CLICK HERE

BENCHMARK TREASURY YIELD STILL HAS ITS HEAD IN THE CLOUD - CLICK HERE

US EXCEPTIONALISM IS NOT DEAD - BERNSTEIN - CLICK HERE

DO YOU REALLY WANT TO BUY BUNDS NOW? MAYBE - CLICK HERE

EUROPEAN RALLY FACES TARIFF RECKONING - CLICK HERE

MORE WORLD NEWS TO WATCH - CLICK HERE

EUROPE BEFORE THE BELL: BUY THE RUMOUR (A LOT) SELL THE FACT (A BIT) - CLICK HERE

MORNING BID EUROPE-CENTRAL BANKS TAKE THE LIMELIGHT, BRIEFLY - CLICK HERE