Stocks reversed sharply on Wednesday after Jerome Powell said the Federal Reserve has made “no decisions” on a rate cut for September, ending weeks of speculation across Wall Street and crypto markets.
The statement came during a press conference following the Fed’s latest policy meeting and immediately triggered losses across major indexes and crypto assets. Powell also said the central bank is still reviewing how President Donald Trump’s new tariffs are affecting inflation.
The S&P 500 dropped 0.12% to close at 6,362.90 after climbing as much as 0.4% earlier in the day. The Dow Jones Industrial Average lost 171.71 points, or 0.38%, ending at 44,461.28. The Nasdaq Composite was the only major index to finish in the green, gaining 0.15% to settle at 21,129.67.
The Fed had left interest rates unchanged during the July meeting, but investors were focused on the press briefing that followed, hoping Powell would hint at cuts coming later in the year. That didn’t happen.
During the briefing, Powell said the Fed’s priority remains controlling inflation expectations. “Our obligation is to keep longer-term inflation expectations well anchored and to prevent a one-time increase in the price level from becoming an ongoing inflation problem,” he said.
He added that “higher tariffs have begun to show through more clearly to prices of some goods, but their overall effects on economic activity and inflation remain to be seen.”
Crypto losses follow Powell’s statement
The fallout wasn’t limited to stocks. Over $212 million was wiped out from the crypto market in the hour following Powell’s comments. That sharp liquidation hit Bitcoin hardest.
One of the most-watched indicators for U.S. demand, the Coinbase Premium Index, turned negative for the first time since May 29, ending a 62-day positive streak. The index compares Bitcoin prices between Coinbase and Binance and is often seen as a measure of institutional interest in the U.S.
Before flipping negative, the premium index had held positive for a record 94 days, showing strong demand from American buyers. That run is now over, and traders are reassessing positioning. While the sudden drop may signal a cooling appetite, the rest of the data paints a mixed picture.
The funding rate for futures contracts stayed flat at 0.01, meaning neither bulls nor bears had a clear advantage. At the same time, the cumulative volume delta (CVD) kept pointing to ongoing sell pressure. Still, the lack of a major breakdown in price shows that buyers haven’t disappeared entirely. The imbalance between selling and price stability hints at a possible shakeout, but no collapse.
There was also no sign of panic from long-term holders. The Net Realized Profit/Loss (NRPL) metric showed no major profit-taking. And the Adjusted SOPR, a signal used to gauge whether traders are selling at a loss or gain, stayed under the 1.10 level that typically signals overheated markets. That suggests people aren’t rushing to cash out despite the dip.
The decision to hold interest rates wasn’t unanimous. Two members of the Fed board, Michelle Bowman and Christopher Waller, dissented. Both wanted a quarter-point cut instead. While they were outvoted, their stance highlights disagreement inside the central bank about how aggressive monetary policy should be in the face of rising prices from Trump’s trade moves.
Traders had been expecting at least one rate cut before the end of the year. Powell’s comments made it clear that the timeline is now uncertain. With tariffs pushing up costs on some imported goods, the Fed appears to be in a wait-and-see mode. That uncertainty is now baked into market sentiment.
By the closing bell, early optimism had vanished. The markets had turned on Powell’s words. The Fed is holding steady, tariffs are heating up, and both stocks and crypto took the hit.
