Stock market today: Nasdaq leads broad rally as markets cheer Fed interest rate decision

The major indexes lost a little bit of steam after Fed Chair Jerome Powell stopped speaking but ended the day solidly higher across the board. The Dow (^DJI) ended the day 0.9%, or almost 400 points, higher. The S&P 500 (^GSPC) finished up 1.1%, and the Nasdaq (^IXIC) gained 1.4%.

Keep scrolling for full coverage of today’s Fed decision and Powell’s comments on the state of the economy and the uncertainty surrounding President Trump’s tariffs.

Powell shrugged off recent pessimistic survey data, noting the economy remains solid.

“The economy seems to be healthy,” Powell said. “We understand that that sentiment is quite negative at this time. And that probably has to do with turmoil at the beginning of an administration that’s making big changes in areas of policy. That’s probably part of it.”

“I do think the underlying unhappiness people have about the economy, though, is more is more about the price level,” he added.

Fears over stagflation, a bleak economic scenario in which growth stalls, inflation persists, and unemployment rises, have escalated in recent weeks as investors attempt to understand the administration’s shifting trade narrative and other policy unknowns, including recent efforts to cut government jobs from Elon Musk’s Department of Government Efficiency (DOGE).

But Powell stressed that there has not been a huge change in the Fed’s forecasts, noting the higher inflation and lower growth projections “cancel each other out” while the slight uptick in the unemployment rate is only “only a one-tenth change.”

In the past several weeks, many forecasts have lowered their base case for US economic growth this year. But notably few are actually calling for recession.

For instance, the Goldman Sachs economics team led by Jan Hatzius slashed its 2025 GDP forecast to 1.7% from 2.4%. Goldman also moved up its odds of a recession in the next 12 months to 20% from 15% prior.

Fed Chair Jerome Powell agreed with this assessment of the economic story on Wednesday.

“If you go back two months, people were saying that the likelihood of a recession was extremely low,” Powell said. “So [it] has moved up, but it’s not high.”

And Powell provided a helpful reminder of how recession odds typically work and said that when considering historical averages, a 20% chance of recession isn’t all that high at all.

“If you look back through the years, it could be within 12 months a 1 in 4 chance of a recession,” Powell said.

Powell said it would be “very difficult” to assess the inflationary impact of President Trump’s trade policy, but that a “good part” of the Fed’s higher inflation forecast for 2025 stems from current and expected tariffs from the new administration.

“The answer is clearly some of it. A good part of [higher inflation expectations] is coming from tariffs,” Powell told reporters. “But we’ll be working, and so will other forecasters, to try to find the best possible way to separate non-tariff inflation from tariff inflation.”

The SEP indicated the Federal Reserve sees core inflation hitting 2.7% next year, higher than December’s projection of 2.5%.

“I do think with the arrival of the tariff inflation, further progress may be delayed,” Powell said.

Still, the central bank leader said “the base case” is that inflation will be transitory.

According to its latest projections, PCE inflation is expected to fall to its 2% target by 2027 and stay at that level throughout the long term, on par with December’s forecast.

When asked why the broader inflation outlook remained unchanged, Powell referenced the heightened policy uncertainty, suggesting “there is a level of inertia” to “stay put” until greater clarity on the path forward emerges.

But Powell was confident about one thing: “Longer-term inflation expectations are mostly well anchored.”

In the past month, plenty of survey data has cited concerns about how tariffs could impact both consumer and business spending. Those fears have sent consumer sentiment tumbling. But there haven’t been enough hard data points, like significantly softening consumer spending numbers, weak labor reports, or a swath of earnings guidance cuts, to complete the story that the US economy is definitely headed for a slowdown.

And for now, Fed Chair Jerome Powell isn’t confident that the hard data will ever reflect the weakness seen in the soft data.

“The relationship between survey data and actual economic activity hasn’t been very tight,” Powell said. “There have been plenty of times where people are saying very downbeat things about the economy and then going out and buying a new car, but we don’t know that that will be the case here.”

He added, “We will be watching very carefully for signs of weakness in the real data. Of course we will. But, you know, given where we are, we think our policy is in a good place to react to what comes.”

The Federal Reserve kept interest rates unchanged in a range of 4.25%-4.5% at its March meeting on Wednesday and signaled it maintain its previously expected pace of cuts.

Fed officials see the fed funds rate falling to 3.9% this year, on par with its previous December projection.

The central bank also raised its respective projections for year-end PCE inflation and the unemployment rate. At the same time, it lowered its economic growth forecast, noting in the policy statement, “Uncertainty around the economic outlook has increased.”

15 officials predict a rate cut this year, with two officials seeing a decrease of more than 0.50%, while four officials see no change, signaling a more hawkish stance compared to December. This month’s expectations for 2025 rates were also less widely distributed compared to the previous projections.

The updated forecasts suggest the Federal Reserve will continue to take a more cautious approach as FOMC leaders attempt to understand the administration’s shifting trade narrative and other policy unknowns, including recent efforts to cut government jobs from Elon Musk’s Department of Government Efficiency (DOGE).

At the same time, fears over stagflation, a bleak economic scenario in which growth stalls, inflation persists, and unemployment rises, have escalated in recent weeks — and Wednesday’s projections underscored that sentiment.

The SEP indicated the Federal Reserve sees core inflation hitting 2.7% next year, higher than December’s projection of 2.5%, before cooling to 2.2% in 2026 and 2.0% in 2027.

Similarly, the Fed raised its forecast for the unemployment rate to 4.4% this year, higher than its previous forecast of 4.3%. Unemployment is expected to tick down to 4.3% in 2026 and remain at that level through 2027.

The Fed also downgraded its previous forecast for US economic growth, with the economy expected to grow at an annualized pace of 1.7% this year before reaching 1.8% growth in 2026 and 2027.

Read more here.

The liveliest debate in markets right now is how much stocks, policymakers, businesses, and economic forecasters are reacting — or should be reacting — to Trump’s tariffs.

And though the Federal Reserve is often the most patient constituent among these groups when it comes to reshaping their current framework, Wednesday’s announcement from the Fed makes clear they are not ignoring what the president is doing on trade policy.

“Uncertainty around the economic outlook has increased,” the Fed said in its statement. “The Committee is attentive to the risks to both sides of its dual mandate.” In Fedspeak terms, these are firm statements: the central bank is attuned to the risks of tariff policies and will not hesitate to build them into its forecasts.

Along with keeping interest rates steady and still forecasting two rate cuts in 2025, the Fed released forecasts for notably lower GDP growth and higher inflation this year.

GDP growth is now expected to be 1.7% in December, down from 2.1% in the Fed’s forecasts published in Dec. 2024. Core inflation is now set to stand at 2.8% at the end of the year, up from an earlier forecast for 2.5%. The Fed targets 2% inflation, on average.

How these revisions — which essentially outlines the contours of an economy showing some stagflationary tendencies — still back the case for two rate cuts this year will be the main topic of Fed Chair Powell’s press conference in about 20 minutes.

But we’d note, those “dot plot” projections aren’t as clean as “two cuts” may sound — 4 Fed officials think only 1 cut will be needed; 4 others see there being no need to cut rates.

The Federal Reserve held interest rates steady in a range of 4.25% to 4.5%.

The central bank also released its latest Summary of Economic Projections (SEP), including its “dot plot,” which maps out policymakers’ expectations for where interest rates could be headed in the future.

The median official’s forecast for the federal funds rate at the end of 2025 was 3.9%, which would likely represent two 25 basis points cuts this year. As part of the Fed’s SEP, officials marked up their projections for core inflation and lowered their forecast for economic growth in 2025. The Fed now also sees the unemployment rate moving to 4.3% from a prior forecast of 4.2%.

Stocks are off their highs of the day less than an hour before the Federal Reserve is set to release its latest monetary policy decision.

The Dow Jones Industrial Average (^DJI) was up about 0.4%, while the S&P 500 (^GSPC) rose about 0.5%. The tech-heavy Nasdaq Composite (^IXIC) led the gains with a rise of more than 0.7% after the major gauges failed to muster a comeback on Tuesday.

Energy (XLE) was the leading sector in the S&P 500 on the day, rising about 1.4%.

The 10-year Treasury yield (^TNX) hovered near 4.31%.

Yahoo Finance’s Brooke DiPalma reports:

General Mills (GIS) is in for a tough 2025 as it tries to sell its lineup of cereals and snacks.

The Cheerios maker reported earnings on Wednesday that included lower guidance. It expects organic net sales to drop 2% to 1.5% for the year, compared to the previous range of flat to up 1%.

“Coming into this year, we thought the consumer environment would improve as the year [goes] on, and that hasn’t really been the case,” CEO Jeffrey Harmening said on its earnings call. General Mills stock fell 2% in morning trading and is down 7% year to date.

Read more here.

The Fed decision is slated for release at 2 p.m. ET. Given the central bank is widely expected to hold interest rates steady, investors will be closely watching the Fed’s Summary of Economic Projections (SEP).

The consensus belief is that Fed policymakers are likely to continue to project two interest-rate cuts this year, in line with market pricing. Meanwhile, they’re seen as lowering their forecast for economic growth and revising their inflation projection higher.

This, Charles Schwab chief fixed income strategist Kathy Jones said, could pose a risk to markets if the Fed’s median projection falls short of two rate cuts. Jones described a median projection of one interest rate cut as a “potential disappointment for markets.”

Tesla stock (TSLA) is up nearly 4% after a bullish upgrade from Cantor Fitzgerald.

Following a recent factory visit, analyst Andres Sheppard wrote that the recent massive downdraft in Tesla shares represented an “attractive entry point for investors.” He sees the company’s autonomous ride-hailing effort in Austin as a likely catalyst for the stock, alongside Full Self-Driving rollouts in China and Europe.

Sheppard upgraded the shares to Overweight from Neutral and maintained his $425 price target. That said, the analyst acknowledged that headwinds remained — like Trump tariffs, the likely loss of EV tax credits, and even CEO Elon Musk’s political forays.

“We also expect a mild 1Q, driven by lower demand in Europe and increased competition in China, plus some negative sentiment from Elon’s polarizing politics,” Sheppard said.

Cantor Fitzgerald’s Tesla upgrade comes after its former chairman and CEO Howard Lutnick left the firm to become US Commerce Secretary, working alongside DOGE leader Elon Musk at the White House.

Though Lutnick stepped down and claims to no longer control Cantor Fitzgerald, he appointed his sons Brandon and Kyle as chairman and executive vice chairman, respectively.

Apartment hunters caught a break in February as rents continued their nationwide decline.

Data from Realtor.com shows that rents dropped to $1,691 last month, slightly lower than in January and down by $15 compared to February 2024. This marks the 19th straight month of year-over-year declines.

Rents have been trending downward for well over a year and a half since the pandemic run-up, but renters are still paying considerably more than they did before. Realtor.com noted that the national rent is 14.4% higher than it was five years ago.

Despite the gradual drop in rents, multifamily housing has become less attractive to investors over the past few years. This has led to lower rental unit inventory for the future, which could push rents higher, according to Realtor.com’s senior economist Joel Berner.

Last year, less than 294,000 units in multifamily rentals were authorized for construction across the 50 largest metros, reaching the lowest level since 2017. Berner projects that if the supply of new rental units continues to shrink, the downward trend of rent prices will not hold.

“We expect rents to start to grow again in the coming years as the pace of new units hitting the market slows,” Berner warned.

Boeing (BA) shares added more than 6% after CFO Brian West provided an upbeat update on the company’s business on Wednesday morning.

The planemaker’s cash burn this year is expected to be “hundreds of millions” of dollars lower than previously thought, West said at a Bank of America investor conference.

“We think we’re off to a good start for the year,” the finance chief said.

Roku (ROKU) shares rose 10% in early trading following news that Trump Media & Technology Group (DJT), the parent company of President Trump’s social media platform Truth Social, has partnered with the tech and hardware company to launch a new app.

Trump Media, which also operates the fintech brand Truth.Fi and streaming platform Truth+, said Wednesday it launched a Roku TV-specific app for users to access the Truth+ platform.

“Now available in the Roku Channel Store, Truth+ offers family-friendly TV programming for patriotic Americans who want an alternative to woke entertainment corporations and biased news channels,” the company said in a press release.

Roku TV owners can download the Truth+ app directly from the Roku Channel Store to their TV sets. In the future, the company plans to introduce Truth+ native apps for additional connected TV platforms, including Samsung and LG.

“We’re bringing Truth+ to Roku and planning to release more TV apps soon,” Trump Media CEO and Chairman Devin Nunes said. “Truth+ is the singular option for non-woke TV and movies, as well as a great alternative to discredited legacy news channels that have squandered the trust of the American people.”

DJT shares rose 3% on the news, although the stock has fallen nearly 40% since the start of the year and is currently trading near the low end of its 52-week range.

Stocks moved slightly higher at the open of US trading on Wednesday.

The Dow Jones Industrial Average (^DJI) was up about 0.2%, while the S&P 500 (^GSPC) rose about 0.3%. The tech-heavy Nasdaq Composite (^IXIC) led the gains with a rise of nearly 0.6%, after the major gauges failed to muster a comeback on Tuesday with tech leading the way down.

Markets are expected to be in wait-and-see mode throughout the trading session ahead of the Federal Reserve’s policy announcement at 2 p.m. ET, followed by Chair Jerome Powell’s press conference about 30 minutes later.

Turkish financial markets plunged after police there arrested Istanbul’s mayor, the main rival to President Erdoğan in Turkey’s next election.

Stocks on Turkey’s benchmark index dropped so fast that it triggered a trading halt, while its currency, the lira, tumbled over 10% to a record low against the dollar at one point.

The signs of a political purge spooked investors focused on the prospects for Turkey’s recent market-friendly policies.

Bloomberg reports:

Read more here.

Tesla (TSLA): Shares in the electric vehicle maker bounced back by 3% in premarket trading after the stock sold off Tuesday on new competitive pressures from Chinese rivals BYD, Xiaomi, and XPeng. Tesla stock has provided a windfall for short sellers this year, as it’s down over 44% since the start of 2025.

Also on Wednesday, Howard Lutnick’s Cantor Fitzgerald upgraded Tesla shares to a Buy rating, writing that the recent sell-off “represents an attractive entry point for investors.”

Strategy (MSTR): The bitcoin holder formerly known as MicroStrategy rose 1.9% in early trading and looks poised to stage a comeback from yesterday’s sell-off. The Michael Saylor-run firm said it would be selling stock to buy more bitcoin on Tuesday, sending mixed signals to investors.

General Mills (GIS): Shares in the maker of Pillsbury and Cheerios fell nearly 4% premarket after General Mills forecast a sharp decline in annual sales and profit Wednesday morning. Consumers switching to private-label brands has hit the cereal and snack maker particularly hard.

Intel (INTC): Intel stock slipped premarket in a week where investors weighed incoming CEO Lip-Bu Tan’s AI plan to turn the ailing chipmaker’s business around. Shares are off by 2.5% after a five-day winning streak.

Wall Street is convinced the Fed won’t make any move on interest rates today, given the risk of Trump’s tariffs hitting the economy. “Uncertainty” is the watchword it expects to hear.

“Fed Chair Powell is probably going to say that over and over,” Wilmington Trust portfolio manager Wil Stith said.

Investors are focused instead on the 2 p.m. ET release of the Fed’s quarterly forecasts — otherwise known as the Summary of Economic Projections (SEP) — for any clues to the path forward, Yahoo Finance’s Jennifer Schonberger reports.

Read more here.

Nvidia (NVDA) shares turned slightly higher in premarket trading, up about 1% as investors digested a stream of news from the chipmaker’s annual GTC event.

The highlight: the next-gen Blackwell Ultra chip, unveiled by CEO Jensen Huang in his keynote on Tuesday. The latest: Nvidia is joining an Abu Dhabi-backed project to develop AI infrastructure pioneered by Microsoft (MSFT) and BlackRock (BLK).

The stock is set to claw back some losses after the AI bellwether’s shares closed over 3% lower on Tuesday. But the jury is still out on whether Nvidia has given its stock bulls the truly fresh catalyst they want, Yahoo Finance’s Brian Sozzi reports.

“Jensen delivered the goods and gave the grand AI vision for Nvidia, and that’s what long term investors want. Short term, traders wanted something more granular, and just like CES, that was unrealistic,” Wedbush tech analyst and Nvidia bull Dan Ives said. “We graded this [an] A+ keynote — inflection point in AI spend.”

Read more on what Wall Street is saying here.