Nasdaq and S&P 500 rally after Fed holds rates steady, but Dow drops over 700 points

The Federal Reserve held its ground on interest rates Wednesday, and Wall Street responded with the kind of mixed signals that make investors reach for a stiff drink. The Nasdaq Composite and S&P 500 both climbed into positive territory after the announcement, while the Dow Jones Industrial Average cratered by 700 to 900 points in the same session. What the Fed actually did The FOMC voted 9-3 to maintain the federal funds rate target range at 3.5%-3.75%. Three members dissented in favor of a hike, which tells you the internal debate at the central bank is far from settled. This marks the fifth consecutive FOMC meeting where rates have stayed put. That streak follows three 25-basis-point cuts in late 2025 that brought rates down from higher levels. Federal Reserve Chair Kevin Warsh struck a hawkish tone, emphasizing the central bank’s commitment to fighting inflation. He stated the Fed “will not hesitate to act” should conditions require it. Why the Dow got crushed while tech rallied Here’s the thing about the divergence between indices: it wasn’t really about the Fed at all. The Dow’s brutal decline was driven primarily by rising oil prices, fueled by escalating geopolitical te...