The S&P 500 closed lower on Thursday following big gains in the previous session as investors digested the latest monetary policy decision from the Federal Reserve.
Nasdaq Composite also fell 0.5 percent to 7,530.88 as Qualcomm shares fell sharply. The Dow Jones Industrial Average eked out a small gain, however, climbing 10.92 points to 26,191.22 to post a four-session winning streak.
The Fed kept interest rates unchanged, as was widely expected. However, the central bank said in a statement it expects “further gradual increases” in the overnight rate. The Fed also did not mention the volatility that has hit the market recently.
Wall Street eagerly awaited the decision as they looked for clues about the central bank’s futures moves on monetary policy. The Fed has hiked rates three times this year and is forecast to raise them once more before year-end.
“Our guess is the Fed’s going to be gradual. They don’t want to force the issue,” said Tim Courtney, chief investment officer at Exencial Wealth Advisors. “They definitely don’t want to be the ones to invert the yield curve.”
Thursday’s moves come after the major stock indexes posted sharp gains following the U.S. midterm election. The S&P 500 and Dow both rose more than 2 percent on Wednesday, notching their biggest post-midterm elections gains since 1982.
The outcome, with Republicans holding control of the Senate and the Democrats getting back control of the House, was widely expected and lifted another layer of uncertainty among the many that investors are dealing with.