U.S. stocks ended Wednesday's session with mixed results as investors digested a cautious Federal Reserve and rising tariff concerns, while economic data pointed to steady—if cooling—underlying growth.

The Dow Jones Industrial Average slipped 44.14 points, or 0.10%, to close at 42,117.70. The S&P 500 edged down 1.85 points, or 0.03%, to 5,980.87, while the tech-heavy Nasdaq Composite managed a modest gain of 25.18 points, or 0.13%, ending at 19,546.3. The small-cap Russell 2000 outperformed, adding 1.08 points, or 0.52%, to finish at 209.63.

Wednesday’s session followed remarks from Federal Reserve Chair Jerome Powell, who struck a careful tone in his post-meeting press conference. Powell emphasized that monetary policy remains “in a good place” and that the Fed is positioned to wait for further clarity on inflation, labor markets, and the potential economic impact of new tariffs.

“We are beginning to see some effects [of tariffs], and we expect to see more,” Powell said, citing early price increases in goods like personal computers and audiovisual equipment. While inflation in core services has moderated, Powell warned that tariff-related pressures may not be short-lived. “The inflationary impact of tariffs remains highly uncertain,” he added, noting the central bank’s need to guard against persistent price increases.

Markets initially showed little reaction to the Fed decision, but the U.S. dollar rallied sharply—up nearly 1%—as investors took Powell’s remarks as a signal of prolonged policy restraint rather than imminent easing.

Despite a flat S&P 500, market breadth remained positive. Advancing stocks outnumbered decliners, with 55.8% of equities closing higher, and 62.4% marking new highs versus 37.6% hitting new lows. Technical momentum stayed firm, with 72.5% of stocks trading above their 50-day moving average, according to Finviz data.

The Fed’s Summary of Economic Projections showed little change to the 2025 outlook, holding the median federal funds rate forecast steady at 3.9%. Powell attributed the division within the committee to differing inflation expectations and levels of risk tolerance, saying, “No one holds these rate paths with a great deal of conviction.”

Geopolitical developments and looming trade deadlines also kept investors on edge. Powell acknowledged ongoing Israel-Iran tensions and the July 9 tariff deadline as key uncertainties, warning that energy prices could see upward pressure. However, he downplayed the risk of long-lasting inflation shocks, highlighting the U.S. economy’s reduced reliance on imported oil.

In terms of economic fundamentals, Powell pointed to resilient domestic demand and a rebound in business investment, even as consumer spending slows. Unemployment remains steady at 4.2%, and Powell noted no signs of significant labor market deterioration.

Looking ahead, investor attention will turn to Powell’s upcoming testimony before Congress on June 25–26, which could provide further insight into the Fed’s evolving outlook and policy response to trade and geopolitical headwinds.

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