Nasdaq wavers as Dow and S&P 500 climb; Fed holds rates at 3.75-4%
The Federal Reserve held interest rates steady on Wednesday at 3.75 to 4 percent, meeting expectations and prompting modest gains in U.S. stock markets. The S&P 500 rose 0.28 percent to 7,744, the Nasdaq Composite climbed 0.27 percent to 26,550, and the Dow Jones Industrial Average gained 0.19 percent to 52,475. This marked the third consecutive winning day for all three indexes. The Fed's decision came with a 10-2 vote, with two officials dissenting in favor of a rate hike, citing persistent inflation concerns. The central bank acknowledged that inflation remains elevated at 3.7 percent annually, above the target of 2 percent. Fed Chair Kevin Warsh emphasized the central bank's commitment to price stability and said more economic data would guide future decisions. Traders are now pricing in an 87 percent probability of a rate increase at the Fed's December meeting.
Key facts
- Federal Reserve held benchmark rates at 3.75-4% on October 28, 2026, with a 10-2 vote
- S&P 500 gained 0.28% to 7,743.98; Nasdaq Composite rose 0.27% to 26,549.85; Dow gained 0.19% to 52,475.10
- Fed raised rates by 0.25 percentage points in September 2026, first increase since 2023
- Inflation at 3.7% annually, up from 3.4% in August, well above Fed's 2% target
- CME FedWatch tool shows 87.4% probability of 25 basis point rate hike at December meeting
- Fed Chair Kevin Warsh stated commitment to 'price stability' and said employment picture is 'quite positive'
- Personal Consumption Expenditures inflation gauge showed prices rising 3.6% year-over-year in September
How different outlets framed it
Left-leaning coverage: Progressive observers highlighted consumer hardship from inflation, the political sensitivity of the rate pause near midterm elections, and concerns about wage stagnation. Some pointed to the Fed's caution in holding rates as partly influenced by economic uncertainty affecting working Americans, while acknowledging disagreement over whether rate hikes or rate cuts better serve employment and affordability.
Right-leaning coverage: Conservative commentators noted inflation remains sticky and questioned whether the Fed should be more aggressive. Some cited the two dissenting votes as validation of inflation-fighting concerns and pointed to Trump's view that rates should be lower. The right-leaning angle stressed that despite the pause, markets are now pricing in December rate hikes, suggesting the Fed may not be truly done tightening.
Limits of this briefing
Markets shifted overnight after Alphabet's disappointing earnings, suggesting stock gains may not persist. The three-day rally ended Thursday with broader losses, indicating the Fed decision's positive market impact was temporary and subject to company-specific earnings surprises.
Sources
- CNBC: S&P 500, Dow rise for third consecutive day after Fed holds steady on rates Centre
- CNN Business: Fed keeps interest rates unchanged, but two officials dissented in favor of a rate hike Centre
- Yahoo Finance: Stock market today: Dow, S&P 500, Nasdaq slip as Alphabet stock sinks 12% and AI jitters return Centre
- Motley Fool: Stock Market Today, Oct. 28: Markets Edge Higher as Fed Holds Rates Steady Centre
- Eurasia Business News: Stock Market Today: Fed Holds Rates Steady, Dow, S&P 500 and Nasdaq Post Modest Gains Centre