S&P 500 Slips as Fed Holds Rates; Historic Dissent Highlights Policy Divide

The S&P 500 slipped 0.1% Wednesday after the Federal Reserve kept its benchmark interest rate steady at 4.25%-4.5%, marking the first double dissent at the central bank since 1993. Fed governors Michelle Bowman and Christopher Waller voted in favor of a 25 basis-point rate cut, underscoring growing divisions over the future of monetary policy.

The Dow Jones Industrial Average rose 171 points, or 0.4%, while the Nasdaq Composite added 0.2%. The Fed’s decision comes amid ongoing pressure from President Trump, who has called for swift rate cuts to stimulate economic growth.

Economic data released earlier in the day showed U.S. GDP expanding 3% in the second quarter, exceeding forecasts of 2.5% and rebounding from a 0.5% contraction in Q1. Private payrolls also jumped by 104,000 in July, following a revised 23,000 drop in June. These figures precede the closely watched nonfarm payrolls report due Friday.

Investor attention is also on corporate earnings, with Meta Platforms and Microsoft reporting after the bell. Nearly 82% of S&P 500 companies have already beaten expectations this season, including Starbucks, Humana, Etsy, and VF Corporation, which all posted stronger-than-expected revenue.

Meanwhile, U.S.-China trade talks in Sweden ended without major breakthroughs, though both sides described the discussions as constructive. Trade tensions remain heightened as the U.S. prepares to impose a 25% tariff on Indian imports beginning August 1, citing its purchases of Russian military equipment and energy.

Market participants are closely watching upcoming economic reports and corporate earnings to gauge the Fed’s next policy steps and assess the impact of escalating trade measures on global growth.