Fed's Rate Decision Jolts Wall Street Amid Economic Uncertainty

U.S. stocks closed sharply lower Wednesday after a volatile trading session, as remarks from Federal Reserve Chair Jerome Powell dampened earlier optimism about a potential rate cut in September.

Investors were initially optimistic after the Fed kept interest rates steady, citing low unemployment and a solid labor market. However, the mood shifted when Powell indicated it was too early to predict a rate cut, causing market expectations to waver.

Earnings reports from major companies like Microsoft and Meta buoyed stocks temporarily, but persisting concerns over tariffs, especially on materials, exerted downward pressure. Market volume remained robust, with mixed performance across major indices.

(With inputs from agencies.)