Dow closes 300 points lower, Nasdaq drops 2% after Fed indicates March rate cut unlikely: Live updates

Stocks fell on Wednesday after Federal Reserve chairman Jerome Powell said the central bank likely wouldn’t be ready to cut rates in March.

The Dow Jones Industrial Average fell 295 points, or 0.7%. The S&P 500 was down 1.5% with tech shares like Alphabet and AMD the biggest losers. The Nasdaq Composite lost 2%.

“I don’t think it’s likely that the committee will reach a level of confidence by the time of the March meeting to identify March is the time to do that,” Powell told reporters on Wednesday. The major averages hit their session lows shortly after the comments.

Traders were closely watching the Fed announcement for signs of when the central bank would begin to cut rates. Powell seemingly threw cold water on the markets expectation for a March cut, noting further encouraging data on inflation was needed.

Still, the central bank did do something traders wanted, which is remove the part of the statement that signaled the central bank still had a tightening bias. The Fed removed a phrase that referred to “additional policy firming.”

“We believe that our policy rate is likely at its peak for this tightening cycle and that if the economy evolves broadly as expected, it will likely be appropriate to begin dialing back policy restraint, at some point this year,” added Powell.

Treasury yields seesawed, with the benchmark 10-year Treasury yield hovering around 4%.

Alphabet dropped more than 6% and was on pace for its worst day since Oct. 25 as disappointing ad revenue overshadowed better than expected earnings and sales. Stock in peer tech firms Microsoft and AMD slipped 2% each on lower-than-expected forward guidance after posting quarterly results.

Shares of Boeing climbed nearly 6% following quarterly results that beat analyst estimates on the top and bottom line. The company has been plagued by recent issues tied to its 737 Max 9 which has pushed Boeing to focus on safety moving forward, Boeing CEO Dave Calhoun said.

Wednesday’s declines ate into the markets’ monthly gains, but all three major averages are tracking to end January on a positive note. The S&P 500 added 1.6%, while the Dow advanced 1.3%. The Nasdaq gained 1.1%.