Stocks fall, oil prices rise in choppy trade after Fed decision
US Federal Reserve Chair Jerome Powell holds a press conference after the Monetary Policy Committee meeting, at the Federal Reserve in Washington, DC. The Fed paused interest rate cuts again on March 19 and noted an increase in economic uncertainty, as it navigates an economy unnerved by the stop-start tariff policies of US President Donald Trump. (Photo by ROBERTO SCHMIDT / AFP)
Washington, United States – Wall Street stocks slipped Thursday after the US Federal Reserve sought to calm fears over President Donald Trump’s tariffs, while eurozone equities slumped.
Meanwhile, oil prices jumped and gold hit a new record high on continued geopolitical tensions — particularly concerning Gaza and Yemen — and fresh US sanctions on Iranian oil.
All three major indices on Wall Street closed lower, giving up some of their gains from Wednesday after Fed chair Jerome Powell suggested that any increase to consumer prices caused by tariffs would likely be short-lived.
READ: US Fed flags rising economic uncertainty, pauses rate cuts again
“We started off in the red, went solidly into the green, only to go back into the red, then back into the green and now we’re kind of flatlining,” CFRA’s Sam Stovall told AFP, shortly before US markets slipped further to close in the red.
The major eurozone markets of Frankfurt, Milan and Paris gave up around one percent or more after European Central Bank chief Christine Lagarde warned a trade war between the United States and Europe could shave half a percentage point off eurozone growth and push up inflation.
Lingering tariff fears and geopolitical developments helped safe-haven gold to another record above $3,057.49 an ounce.
The price of copper reached a five-month high above $10,000 a tonne as US companies stock up on the metal targeted by Trump’s tariffs.
Oil ‘in the spotlight’
Oil prices jumped amid a fresh upsurge in Gaza hostilities and worries about Iran-backed Huthi rebels.
“The prospect of an extended US campaign against the Huthis combines with Israel’s renewed Gaza offensive to put oil squarely back in the spotlight,” said Chris Beauchamp, chief market analyst at online trading platform IG.
In other central bank action, the Bank of England and Sweden’s Riksbank held interest rates steady Thursday, following in the footsteps of the Fed and the Bank of Japan a day earlier.
Meanwhile, the Swiss central bank cut its rates on Thursday, citing “high uncertainty” in the global economy.
Nevertheless, most markets had their focus Thursday on the United States, the world’s biggest economy.
“Great uncertainty remains over the direction of travel for the US economy, with business activity likely to remain subdued until we see greater clarity over the trade relationships and potential pricing for US imports and exports,” noted Scope Markets analyst Joshua Mahony.
Trump’s painful duties on imports into the United States and threats of further tariffs have stoked recession fears.
But the Fed only trimmed its forecast for US growth this year to 1.7 percent from a previous estimate of 2.1 percent in December, suggesting it does not think a recession is likely at this moment.
Policymakers expect inflation — excluding volatile food and energy prices — to hit 2.8 percent this year, up from 2.5 percent in its last forecast in December.
But Fed Chair Jerome Powell continued to insist that any increase in inflation would be “transitory.”
