A television displays the Federal Reserve decision to leave interest rates unchanged as a trader works on the floor of the New York Stock Exchange (NYSE) in New York, US, on Wednesday, July 29, 2026.
Michael Nagle | Bloomberg | Getty Images
Stocks fell Wednesday, after the Federal Reserve in a widely anticipated move kept to the sidelines in its latest rate decision. Chip stocks also extended their decline.
The Dow Jones Industrial Average traded 741 points lower, or 1.4%. The S&P 500 shed 0.3%, while the Nasdaq Composite dipped 0.1%.
The Fed kept interest rates unchanged, but with dissents from three officials who voted to raise rates. Cleveland Fed President Beth Hammack, Neel Kashkari of the Minneapolis Fed and Dallas Fed’s Lorie Logan all voted in favor of a rate increase. Fed funds futures are now pricing in a 72% likelihood of a quarter-point raise at the September meeting, according to the CME FedWatch Tool.
“The Fed appears to be running out of patience with above-target inflation, despite recent data coming in cold. The committee’s growing hawkish sentiment, shown by the three dissents against today’s hold, has also likely been exacerbated by the recent flare up in hostilities in the Middle East,” wrote Kay Haigh, global head and CIO of fixed income and liquidity solutions at Goldman Sachs Asset Management.
“A hike in September is finely balanced, with any further action likely dependent on a combination of developments in the Middle East and the next two CPI prints,” he added.
Oil prices extended their gains after President Donald Trump told a Fox News reporter that the U.S. will be hitting Iran “hard” in response to the surprise attacks. West Texas Intermediate crude futures advanced more than 7% to trade above $90 a barrel.
This comes after U.S. Central Command said in a social media post late Tuesday that Islamic Revolutionary Guard Corps forces launched “multiple ballistic missiles in an attempted surprise attack on U.S. forces based in the Middle East.” The missiles were successfully intercepted, Centcom said.
Semiconductors fell, with the iShares Semiconductor ETF (SOXX) last down nearly 3%. Chip stocks are coming off four straight losing sessions, down 9% week to date, amid growing anxiety over the return on massive artificial intelligence spending, as well as fears of greater competition from China.
Micron Technology dipped 6%, while Advanced Micro Devices slipped more than 3%. Shares of KLA dropped more than 8%.
Shares of Procter & Gamble fell more than 2%, after the consumer goods company missed revenue expectations in its latest quarter. Ford Motor shares jumped 4% after the automaker beat earnings expectations and lifted its 2026 forecast.
