Stocks Decline as Fed Maintains Rates Amid Hawkish Cues

U.S. stock markets closed lower on Wednesday, with the S&P 500 down 0.47% and the Dow Jones down 0.31%, following the Federal Reserve's decision to keep interest rates unchanged at 4.25%-4.50%. The Fed's post-meeting statement indicated a more hawkish stance, suggesting a prolonged pause in rate cuts, which contributed to the negative sentiment in the markets. Notable corporate earnings disappointments weighed heavily on stocks, particularly Packaging Corp and Danaher, which saw significant declines. Conversely, ASML Holding NV's strong quarterly performance boosted chip stocks, rising over 4% amid increased demand driven by the AI sector. Fed Chair Powell emphasized that the economy remains strong and there's no urgency to adjust the policy stance, further impacting market reactions. As earnings season progresses, analysts expect S&P 500 earnings to have grown by 7.5% year-over-year in Q4, which adds complexity to the economic outlook.