Major US stock indexes finished trading below zero

Major US stock indexes have declined significantly, a catalyst for which were the outcome of the Fed meeting and statements by Fed Chairman Powell, who made it clear that lowering the rate is not the beginning of a long mitigation cycle, but an adjustment in the middle of the cycle,

The Fed lowered the rate by 25 bp, as market participants expected. For such a decision were all, except for two members of the FOMC. The Fed described the state of the economy as strong, but also said that “in the light of the consequences of events in the world, for the prospects of the economy and restrained inflationary pressure”, lowering rates is now the right step. This is the first reduction in rates under the chairmanship of Powell, as well as the first decrease since the end of 2008, when the Central Bank lowered rates to almost zero / The Fed statement indicated that the labor market remains strong and economic growth continues at a moderate pace, while continue to spend cash.

Meanwhile, Fed Chairman Powell said that lowering rates should be viewed as a “mid-cycle adjustment” that will help the economy develop as the Fed wants. Powell noted that he thinks that in general, a change in the Fed's monetary policy this year from hard to soft will help the economy. He added that lowering the rate would “work through trust channels,” as well as by reducing the cost of short-term borrowing.

In addition, the last round of trade negotiations between the US and China ended on Wednesday without any major breakthrough. The Chinese Ministry of Commerce reported that both sides will meet again in Washington in September.

Market participants also analyzed a report from ADP, which showed that employment in the private sector increased by 156,000 jobs in July, after rising by 112,000 jobs in June. Economists predicted that employment would increase by 150,000 jobs, compared with the addition of 102,000 jobs that were originally reported in the previous month.

Most of the components of DOW finished trading in the red (26 out of 30). The outsider was Microsoft Corporation (MSFT; -2.70%). The leader of growth were shares of Apple Inc. (AAPL; + 2.57%).

Almost all sectors of the S & P recorded a decline. The largest decline was shown by the technology sector (-1.2%). Only the conglomerate sector grew (+ 0.3%).

At the time of closing:

Dow 26,864.27 -333.75 -1.23%

S & P 500 2,980.38  -32.80 -1.09%

Nasdaq 100 8,175.42 -98.19 -1.19%