Stocks continued falling on Wednesday as Federal Reserve Chair Jerome Powell discussed stalling progress on inflation and uncertainty around fiscal policy in 2025.
The Dow Jones Industrial Average was down 444 points, or 1%. The S&P 500 was down 1.2%. The Nasdaq Composite was down 1.4%. All three indexes were rising prior to the Fed’s latest quarter-point cut.
Powell said inflation has once again underperformed relative to expectations.
“As we think about further cuts, we’re going to be looking for progress on inflation,” he said.
Uncertainty around inflation among Fed officials is higher. Powell said some officials started to incorporate estimates for the impact of economic effects of policies, while others opted not to.
“The point about uncertainty, it’s kind of common sense thinking that when the path is uncertain, you go a little bit slower,” Powell said. “It’s not unlike driving on a foggy night or walking into a dark room full of furniture. You just slow down. So that might have affected some of the people.”
President-elect Donald Trump campaigned on tax cuts and tariffs, policy moves that could lead to higher prices.
The Dow was on pace for its worst Fed decision day since March 22, 2023, according to Dow Jones Market Data. The S&P and Nasdaq Composite were on track for their worst Fed decision day since Jan. 31.