U.S. markets rose slightly after the Federal Reserve's decision to maintain interest rates and update its growth forecasts, in a period marked by extreme caution from investors.
Both the Dow Jones and S&P 500 recorded a rise of 0.5%, while Nasdaq climbed 0.4%, partially ignoring the existing tensions.
Concerns about the expansion of the Israeli-Iranian conflict and its potential impacts
Markets declined the previous day amid fears that the clashes between Israel and Iran could escalate into a wide regional conflict, with reports that President Donald Trump is considering a strike on an Iranian nuclear facility.
The Fed keeps interest rates unchanged amid Trump's transformations and escalating tensions.
The U.S. Federal Reserve kept interest rates unchanged on Wednesday, as officials continue to monitor the implications of the radical political changes being implemented by President Donald Trump, alongside escalating tensions in the Middle East.
The central bank kept the benchmark lending rate within a range of 4.25% to 4.5%, the same level it has maintained since January.
The Fed expects a slowdown in growth and a limited interest rate cut
Federal Reserve forecasts indicate a slowdown in GDP growth, with a slight rise in unemployment and inflation rates compared to the March estimates.
Policymakers at the bank forecast GDP growth of 1.4% in 2025, down from 1.7% in March forecasts, while long-term growth estimates remained stable at 1.8%.
Regarding interest rates, Federal Reserve officials expect to cut them by 50 basis points during 2025, while forecasts indicate a reduction of only 25 basis points in 2026, compared to 50 basis points in previous estimates.