Major U.S. stock indexes closed mostly higher Wednesday after the Federal Reserve cut its benchmark interest rate for a second time this year, citing slowing global economic growth and uncertainty over U.S. trade conflicts.
Gains in banks, utilities and technology companies outweighed losses elsewhere in the market, which had been broadly lower until the last hour of trading. Bond yields moved lower.
Stocks initially declined after the central bank announced the widely expected rate cut. Its policy statement failed to indicate whether more rate cuts were likely this year, though the central bank left the door open for additional rate cuts if the economy weakens.
"We're not on a preset course," Fed Chairman Jerome Powell said in an afternoon press conference.
Even so, diverging opinions within the members of the Fed's policymaking committee left some investors feeling uneasy about what the Fed may do next.
"The (Fed) cut rates, as expected, but the quantity and necessity of future rate cuts were called into question," Sam Stovall, chief investment strategist at CFRA, wrote in a research note.
The S&P 500 index inched 1.03 points higher, or less than 0.1 percent, to 3,006.73. The benchmark index is now within 0.7 percent of its all-time high set in July.
The Dow Jones Industrial Average rebounded after being down most of the day, adding 36.28 points, or 0.1 percent, to 27,147.08. The Nasdaq slid 8.62 points, or 0.1percent, to 8,177.39.
The Russell 2000 index of smaller company stocks bore the brunt of the selling, dropping 9.95 points, or 0.6 percent, to 1,568.34.
The Fed is trying to combat threats to the U.S. economy, including uncertainties caused by President Donald Trump's trade war with China, slower global growth and a slump in American manufacturing.
Investors largely expected the Fed to cut short-term interest rates by another quarter of a percentage point, following a similar cut in late July. The rate, which is now at a range of 1.75 percent to 2 percent, influences many consumer and business loans.
The broader market has been wobbling this week and is so far on track for a slight weekly loss after three consecutive weeks of gains. Those gains came as both sides in the U.S.-China trade war took steps to ease tensions ahead of planned negotiations in October.
But the volatility has been taking its toll. The S&P 500 is eking modest gains of 2.2 percent for the quarter with just a few weeks left. That marks a pullback from gains of 3.8 percent in the second quarter and a notable deceleration from the 13.1 percent rise during the first quarter.
Bond prices rose and the yield on the 10-year Treasury fell to 1.80 percent from 1.81 percent late Tuesday. Investors typically shift money into bonds when they grow more concerned about the economy's health.
Financial stocks recovered from an early slide. JPMorgan gained 1 percent and Citigroup rose 0.9 percent.
A disappointing drop in quarterly profit weighed on FedEx shares, which tumbled 12.9 percent, making it the biggest decliner in the S&P 500. The package delivery giant also cut its full-year forecast.
Adobe fell 1.8 percent after giving investors a weak profit forecast.
Major stock indexes in Europe closed mostly higher. Asian stocks ended mixed.