Investing.com – Stocks slumped Wednesday after the Federal Reserve cut its key interest rate to support the domestic economy amid slowing global growth, but Fed Chairman Jerome Powell indicated this was not the first cut of a monetary easing cycle.
The S&P 500 and the Nasdaq Composite were all off about 1% at 3:15 p.m. ET. The Dow Jones Industrial Average was off 1.1%, with only Apple (NASDAQ:AAPL) and Pfizer (NYSE:PFE) showing gains.
At its bottom, the Dow was off 478 points. The Nasdaq was off 164 points. It was the worst loss for the major averages since early July.
The selloff appears prompted by investors' unhappiness with the Fed's explanation of why it cut its federal funds rate to 2% to 2.25% from 2.25% to 2.5%, its first in a decade.
In his news conference after the rate cut announcement, Powell was struggling to explain the need for a rate cut when the domestic economy is performing well. He said he was more worried about business investment, global growth and dealing with rising trade tensions. He confused many traders first by suggesting the cut was a "one-and-done" and then said there might be more cuts.
He called the move a mid-cycle policy adjustment.