Stocks closed lower on Wednesday, erasing their intraday gains within the last hour of trade.

Concerns over heightened tensions in the Middle East, and uncertainty over whether the U.S. will get involved in the Israel/Iran conflict likely weighed on shares.

The FOMC Announcement came out on Wednesday afternoon. As expected, the Fed kept rates unchanged. This was the fourth meeting in a row where the Fed took no action on rates.

Fed Chair, Jerome Powell had a lot to say at his press conference that followed. And it was actually quite supportive.

He said "despite elevated uncertainty, the economy is in a solid position, the unemployment rate remains low, and the labor market is at or near maximum employment."

The Fed's SEP (Summary of Economic Projections) forecasts full-year GDP at 1.4% for 2025. He noted the increase in imports in Q1, in an effort to beat the upcoming tariffs, caused a distortion in Q1's GDP. So, their growth forecast should help put to rest worries over a recession. In addition to a solid 2025 forecast, they estimate GDP for 2026 at 1.6%.

They noted the unemployment rate of 4.2% is low and was in a narrow range over the past year, and reiterated that it is "broadly in balance and consistent with maximum employment." They do see an increase in the unemployment rate for all of 2025 to 4.5%. But that's still historically pretty low. They also see it saying at that rate for 2026 as well. Once again, underscoring the strength and resilience of the economy.

With PCE inflation at 2.3% y/y (2.6% for core, i.e., ex-food & energy), they do expect it to go up a bit for the rest of the year, putting total inflation at 3% for 2025, but back down to 2.4% for 2026, and 2.1% for 2027.

As for interest rates, the Fed Funds rate remains at a midpoint of 4.38%. But they are still expecting rates to fall to 3.9% by year's end, which indicates 2 rate cuts on the docket for this year (presumably 25 basis points each). They are also projecting rates to fall to 3.6% in 2026 (1 rate cut), and 3.4% in 2027 (1 rate cut).

The continued pause on rates was expected. And, in general, so were the other data points. But hearing the Fed say it out loud, and provide their projections, which I'm interpreting as bullish, was good for the market to hear.

With 1 more day to go, the S&P and Nasdaq are up for the week, so far (albeit just a tad), while the Dow is down (also by a tad). The small-cap Russell 2000 and mid-cap S&P 400 are also up for the week.

Today is Quadruple Witching, which means index futures, stock futures, index options, and stock options all expire. So, there could be some extra volatility today.

But if all goes well today, the major indexes could notch an up week.

Best,