Investing.com - Stocks fell sharply Wednesday after the Federal Reserve cut its key interest rate to support the domestic economy amid slowing global growth, but indicated more cuts are up in the air.
The selloff was due in part to Fed Chairman Jerome Powell's confusing investors by first suggesting the cut might be the only cut and then saying there might be more. His first comment cause a huge selloff, sending the Dow Jones industrials down as many as 478 points before buying came in to pull the index back from the brink.
The S&P 500 fell 1.1%, and the Nasdaq Composite dropped off about 1.2%. The Dow was off 1.2%. Fewer than 20 stocks in the Nasdaq 100 showed gains, along with fewer than 10 Dow stocks.
Among the strongest stocks of the day was Apple (NASDAQ:AAPL), up 2% after a strong earnings report on Tuesday.
The selloff appears prompted by investors' unhappiness with the Fed's explanation of why it cut its federal funds rate to 2% to 2.25% from 2.25% to 2.5%, its first cut in a decade.
In his news conference after the rate cut announcement, Powell was struggling to explain the need for a rate cut when the domestic economy is performing well. He said he was more worried about business investment, global growth and dealing with rising trade tensions.
He confused many traders first by suggesting the cut was a one-and-done, saying the rate cut was just a "mid-cycle adjustment." Then, he said there might be more cuts. At the end of the conference he also indicated hikes were on the table.
That helped stocks cut their losses substantially.
Oil prices were higher. The 10-year Treasury yield fell to 2.018% from 2.061% on Tuesday.