Fed Rate Cut Leaves Markets Mixed as S&P 500 Slips

U.S. stocks closed mixed Wednesday after the Federal Reserve announced a widely expected interest rate cut and signaled two additional reductions later this year. The S&P 500 dipped 0.1% to finish just below record highs at 6,626.99, while the Dow Jones Industrial Average gained 260 points, or 0.6%. The Nasdaq Composite slipped 0.3%.

The Fed reduced its benchmark rate by 0.25% for the first time in nine months, citing a cooling labor market that threatens growth despite inflation still above its 2% target. Policymakers now project three rate cuts in 2025, up from one previously forecast, though Morgan Stanley noted the consensus is fragile, with a single shift in votes cutting the median back to two. Inflation and unemployment projections for this year remain unchanged.

On Wall Street, General Mills (NYSE:GIS) shares fell as the food giant reported weaker demand in its core North America segment, with volumes down 16% year-over-year. The company reaffirmed annual sales and profit guidance but warned that category growth may undershoot long-term expectations amid cautious consumer spending and tariff-driven uncertainty.

Apple (NASDAQ:AAPL) reported a 6% drop in China smartphone sales ahead of the iPhone 17 launch, according to Counterpoint Research. Meanwhile, Lyft (NASDAQ:LYFT) stock jumped after unveiling a partnership with Waymo to bring self-driving ride-hailing to Nashville in 2026, while rival Uber (NYSE:UBER) slipped.

Workday (NASDAQ:WDAY) rose after activist investor Elliott Management revealed a $2 billion stake, showing confidence in leadership. Baidu (NASDAQ:BIDU) surged as optimism grew around its AI chip efforts, seen as key to China’s semiconductor independence push.

Markets remain focused on Fed policy, consumer demand trends, and corporate earnings as investors gauge the path forward for growth and inflation.