Wall Street opened flat on Thursday as investors weighed in on the Federal Reserve’s latest policy move.
On Wednesday, the Fed implemented a 25-basis-point rate cut, bringing the benchmark interest rate down to a range of 4.00%–4.25%. This marks the central bank’s first rate cut since December 2024.
At the opening bell, the Dow Jones Industrial Average (.DJI) rose 38.2 points, or 0.08%, to 46,056.55. The S&P 500 (.SPX) gained 26.5 points, or 0.40%, to 6,626.85, while the Nasdaq Composite (.IXIC) advanced 177.8 points, or 0.80%, to 22,439.11.
On September 17, 2025, the Federal Reserve lowered its key interest rate by 25bps. This was the first rate cut since December 2024.
Fed also said it might lower the rate two more times this year. This decision is mainly due to concerns about the country’s job market, as hiring has slowed down and unemployment has risen.
The central bank had kept the interest rate the same earlier this year as it watched how things like tariffs and changes in immigration laws affected the economy.
Now, with inflation still above the 2% target but slowing down, the Fed is focusing more on jobs and the labour market.
Lower interest rates make borrowing money cheaper for things like homes, cars, and business loans, which can help boost the economy and create more jobs.
Federal Reserve Chair Jerome Powell said the risks to employment are growing in this weaker job market. While the Fed expects to lower rates a few more times this year, they don’t expect to make many more cuts in 2026.
One member of the Federal Reserve, Stephen Miran, disagreed with the decision. He wanted a bigger rate cut of 0.5%, but Powell said most others did not agree with that.
Despite some differences, the meeting showed that Powell was able to get support from the rest of the Federal Reserve, even though some members were appointed by President Trump.
At the same time, inflation is still a problem, as it rose 2.9% in August compared to last year, which is above the Fed’s target of 2%.