The US markets ended mostly lower on Wednesday after the Federal Reserve left interest rates unchanged but signaled another imminent rate increase. With the decision widely anticipated, closer attention was paid to the accompanying statement, which included only minor changes from the June statement. The Fed said economic activity has been rising at a strong rate, compared to the assessment in June that economic activity had been rising at a solid rate. The central bank also reiterated that further gradual increases in interest rates will be consistent with its objectives and once again called risks to the economic outlook roughly balanced. Further, the Fed is scheduled to hold its next monetary policy meeting in late September, with CME Group’s FedWatch Tool currently indicating a 91 percent chance for a quarter-point rate hike. Fresh worries over US-China trade friction too dampened sentiment amid report that Donald Trump's administration is considering raising the proposed tariff on $200 billion worth of Chinese imports to 25 percent from the 10 percent announced last month.
On the economic front, payroll processor ADP released a report showing private sector employment increased by much more than expected in the month of July. ADP said private sector employment jumped by 219,000 jobs in July after climbing by an upwardly revised 181,000 jobs in June. The street had expected an increase of about 185,000 jobs compared to the addition of 177,000 jobs originally reported for the previous month. Meanwhile, a separate report from the Institute for Supply Management showed a slowdown in the pace of growth in manufacturing activity in the month of July.
The S&P 500 lost 2.93 points or 0.10 percent to 2813.36 and the Dow Jones Industrial Average was down by 81.37 points or 0.32 percent to 25,333.82, while the Nasdaq jumped 35.50 points or 0.46 percent to 7,707.29.
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