U.S. Stocks Fall as Tech Earnings Weigh and Fed Signals Rate Cut Uncertainty

U.S. stocks closed lower Thursday, with the S&P 500 and Nasdaq dragged down by weakness in major tech names and caution from the Federal Reserve. At 4:00 p.m. ET, the Dow Jones Industrial Average slipped 110 points, or 0.2%, while the S&P 500 dropped 1% and the Nasdaq Composite declined 1.6%.

President Donald Trump described his meeting with Chinese President Xi Jinping as “amazing” and “outstanding,” hinting at progress in easing U.S.-China trade tensions. He said a trade deal could come “pretty soon,” and announced he will visit China in April. Trump confirmed that the U.S. will continue to sign annual supply agreements for rare earth minerals and that China agreed to resume agricultural imports, particularly soybeans. He also announced a cut in fentanyl-related tariffs to 10%, though overall U.S. tariffs on Chinese goods remain around 47%.

The Federal Reserve trimmed interest rates by 25 basis points to a range of 3.75%–4.00%, marking its second consecutive cut. However, Fed Chair Jerome Powell warned that another rate reduction in December was “far from” guaranteed, citing mixed signals in inflation and employment. Analysts at ING still expect at least two more rate cuts next year to bolster growth and weaken the dollar.

Tech stocks led declines, with Meta Platforms sliding after revealing plans to ramp up AI spending despite investor concerns over profitability. Microsoft also fell despite strong cloud and AI revenue growth, while Alphabet jumped as quarterly revenue and net profit surged 33% year-over-year to $35 billion.

In other earnings news, Restaurant Brands, Eli Lilly, and Estee Lauder posted stronger-than-expected results, while Biogen dropped after cutting its full-year profit outlook.