The S&P 500 declined on Wednesday after the Federal Reserve left interest rates unchanged in its first policy decision of the year, while Nvidia extended its recent losses.
The Dow Jones Industrial Average shed 136.9 points, or 0.3% to 44,713.5, the S&P 500 fell 28.4 points or 0.5% to 6,039.3, while the Nasdaq Composite lost 101.3 points or 0.5% to 19,632.3.
Nvidia shares dropped 4% after Bloomberg News reported that Trump administration officials have discussed tightening restrictions on the company’s chip sales to China following the emergence of the DeepSeek AI model.
The stock has now fallen over 13.2% this week as regulatory concerns weigh on investor sentiment.
Meanwhile, the Federal Reserve maintained the federal funds rate in a range of 4.25% to 4.5%, pausing after three consecutive rate cuts since September 2024. In its post-meeting statement, the central bank struck a more cautious tone on inflation.
“The unemployment rate has stabilized at a low level in recent months, and labour market conditions remain solid,” the statement read. “Inflation remains somewhat elevated.”
During a press conference, Fed Chair Jerome Powell noted that he has had “no contact” with President Donald Trump, despite the newly inaugurated leader stating at the World Economic Forum in Davos that he would “demand” lower interest rates.
Trump and Powell have had a historically strained relationship dating back to Trump’s first term.
Markets were also bracing for a wave of Big Tech earnings, with Meta Platforms, Microsoft, and Tesla set to report their quarterly results after the closing bell.
