U.S. stocks flipped from modest gains to losses Wednesday afternoon, following the release of a decision by the Federal Reserve's interest-rate setting committee to cut the federal funds rate by a quarter point to between 2% and 2.25%, while ending its plan to reduce its balance sheet through the sale of government bonds two months earlier than expected. The Dow Jones Industrial Average DJIA, -0.17% fell by 77 points or 0.3%, to 27,125 and the S&P 500 SPX, -0.
Lower interest rates are typically bullish for stocks, as they compress the yield investors earn on bonds and other debt, making equity investments more attractive in comparison. They also are thought to stimulate economic activity by lower borrowing costs for households and corporations. However, investors were widely expecting a 0.
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