[New York Stocks] Fed Holds Rates Steady for Third Time... Mixed Close as Oil Prices Surge

As the U.S. Federal Reserve (Fed) kept its benchmark interest rate unchanged for the third consecutive time, concerns over a prolonged energy supply issue were reflected in the market, leading the three major indices on the New York Stock Exchange to close mixed on April 29 (local time).

At the New York Stock Exchange (NYSE), the Dow Jones Industrial Average ended at 48,861.81, down 280.12 points (0.57%) from the previous session. The S&P 500, which focuses on large-cap stocks, fell by 2.85 points (0.04%) to close at 7,135.95, while the tech-heavy Nasdaq rose by 9.441 points (0.04%) to finish at 24,673.241.

View of the New York Stock Exchange. New York, USA ? Photo by Yoonjoo Hwang

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On this day, the Fed announced after concluding its April Federal Open Market Committee (FOMC) meeting that it would keep the benchmark interest rate unchanged at 3.50-3.75%. Fed Chair Jerome Powell mentioned high energy prices during a press conference, explaining that they "will drive up overall inflation."

The Fed had cut rates for three consecutive months in September, October, and December last year. However, it has decided to hold rates steady for three consecutive meetings this year-in January, March, and April. This is due to the view that the surge in international oil prices, triggered by the Iran war, is fueling inflation.

Notably, the latest FOMC meeting drew attention as internal disagreements over the direction of monetary policy widened. Four out of the twelve committee members opposed the decision. The Wall Street Journal noted that this was the highest number of dissenting votes since October 1992.

Additionally, Chair Powell announced that he would remain on the Fed board of governors after his term as chair ends. CNBC assessed that Powell’s continued presence as a governor reduces the likelihood of a rate cut by the Fed. There are a total of seven Fed governors, three of whom were appointed by U.S. President Donald Trump. By remaining on the board, Powell ensures that appointees from the Trump Administration do not constitute a majority.

On the same day, international oil prices closed higher on expectations that the closure of the Strait of Hormuz could be prolonged. This came after President Trump stated in an interview with Axios that "the strait will remain closed until Iran agrees to a nuclear deal."

At the ICE Futures Exchange, June delivery Brent crude surged 6.1% from the previous session to close at $118.03 per barrel. Brent crude prices soared as high as $119.76 during trading, marking the highest level since June 2022-about four years ago. At the New York Mercantile Exchange, June delivery West Texas Intermediate (WTI) crude rose 6.95% to close at $106.88 per barrel.

The market is also paying close attention to Alphabet's earnings announcement after the close. Chris Brigati, Chief Investment Officer at SWBC, commented, "While major technology companies’ earnings are generally expected to surpass estimates, the market is focused on their growth trajectory and outlook for future investment pace," adding, "Delivering tangible results from high capital expenditures remains a key challenge."

Most of the large-cap stocks declined on the day. Nvidia fell 1.94%, Apple 0.20%, Microsoft 2.86%, Amazon 0.21%, TSMC 0.55%, Tesla 0.96%, and Meta 5.42%. However, Alphabet, which was scheduled to announce its earnings after the close, surged 4.61% to settle at $365.90. Broadcom also rose 1.49% on the day.

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