U.S. stock markets saw choppy trading on Wednesday as investors reacted to the Federal Reserve’s January meeting minutes and new tariff announcements from President Donald Trump. The S&P 500 edged higher, setting the stage for a second consecutive record close, while the Nasdaq remained flat and the Dow dipped slightly.
“The market continues to work its way higher, so ‘resiliency’ is the watchword that I would give to the market right now,” said Sam Stovall, chief investment strategist at CFRA Research.
Fed Minutes Highlight Inflation Concerns
At its latest meeting, the Federal Reserve chose to keep interest rates unchanged. The minutes revealed policymakers’ concerns over persistent inflation and the impact of Trump’s trade policies, particularly tariffs, on their ability to control price growth.
“Fed is going to continue to be data-dependent, and they’re in no hurry to cut interest rates,” Stovall added. “(There’s) really nothing new, but at the same time, nothing unexpectedly negative.”
Tariffs and Economic Indicators Weigh on Markets
On Tuesday, Trump announced plans to impose a 25% tariff on autos, semiconductors, and pharmaceuticals, raising concerns about an escalating global trade war. Meanwhile, the Commerce Department reported a sharp 9.8% drop in January housing starts, attributed to high mortgage rates and harsh winter conditions.
Among the major S&P 500 sectors, healthcare saw the biggest gains, while materials lagged. Market breadth was mixed, with more declining stocks than advancing ones across both the NYSE and Nasdaq. Fourth-quarter earnings remained a bright spot, with 74% of S&P 500 companies exceeding expectations, according to LSEG.