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US markets end in red following Fed’s economic outlook

21 Mar 2025 Evaluate

The US markets swung back and forth to close modestly lower on Thursday amid concerns about the economic outlook following the Federal Reserve's monetary policy announcement. The Fed left the interest rates unchanged but the projections signalled towards to resuming the rate cut later this year. However, investors took cautious approach after Fed lowered its projections for GDP growth in 2025 to 1.7 percent from 2.1 percent and raised their forecasts for consumer price growth this year to 2.7 percent from 2.5 percent. Moreover, Fed Chair Jerome Powell has stated that good part of the higher inflation forecast is due to tariffs which weighed on investor sentiment. Traders overlooked signs of healthy labor market after data showed initial jobless claims were in line with expectations, while the home sales topped the estimates. 

Besides, Homebuyers are starting to reenter the market as more housing becomes available to buy, leading to a better-than-expected increase in February. According to the National Association of Realtors, sales of existing homes rose 4.2% in February from January, to a seasonally adjusted annual rate of 4.26 million units. On sectoral front, Airline stocks moved significantly lower over the course of the session, dragging the NYSE Arca Airline Index down by 1.7 percent. Networking and computer hardware stocks also showed notable moves to the downside, while most of the other major sectors showed more modest moves on the day

Dow Jones Industrial Average decreased 11.31 points or 0.03 percent to 41,953.32, Nasdaq fell 59.16 points or 0.33 percent to 17,691.63 and S&P 500 was down by 12.40 points or 0.22 percent to 5,662.89.

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