Wall Street Rises After Fed Holds Rates, Warns of Economic Risks

The Federal Reserve maintained interest rates at current levels during Wednesday while warning about growing economic threats from the US-China trade conflict. The S&P 500 index increased 0.4% after two consecutive days of decline while the Dow Jones rose 284 points (0.7%) and the Nasdaq gained 0.3%. Market performance remained unstable because investors became more hopeful about a US-China trade agreement after Switzerland announced upcoming weekend negotiations. The combination of Trump’s 145% Chinese goods tariffs and China’s 125% retaliatory tariffs has created widespread concerns about a potential recession. The optimism about trade negotiations received a setback from Trump because he refused to reduce tariffs during negotiations while China demands de-escalation. The Fed acknowledged inflation risks from tariffs which made it harder to consider rate cuts. The market received some support from strong corporate earnings but the market remains concerned about rising consumer prices and supply chain disruptions. The upcoming trade talks between Treasury Secretary Scott Bessent and other officials represent a vital development yet experts agree that resolving fundamental US-China tensions demands prolonged diplomatic efforts because global economic stability remains at risk.