Tech rally fizzles after Fed promises low rates through 2023

U.S. equity markets rallied, then cooled off to closed mixed, after the Federal Reserve enacted its plan to keep interest rates low through at least 2023 to support the economy as it normalizes following the sharpest economic slowdown of the post-World War II era.

The tech-heavy Nasdaq Composite, paced the selling, over 1.2% led by the likes of Apple and Amazon.

The Dow Jones Industrial Average gave up a triple point lead to end the session little changed, while the S&P 500 fell 0.46%.

The Federal Reserve kept its benchmark interest rate between 0% and 0.25% and said inflation would be allowed to overshoot the central bank's 2% target "for some time." The strategy was laid out last month at the Fed's virtual Jackson Hole Symposium conference.

During the Q&A Fed Chair Jerome Powell reiterated it may take some time for unemployment levels to return to pre-COVID levels and more fiscal and monetary stimulus may be needed.

Even with the late day pullback, financial stocks maintained gains with borrowing costs expected to stay favorable for the U.S. consumer.

Energy shares also gained as Hurricane Sally produced two feet of rain as it made landfall on the Alabama coast and worked its way through the Florida Panhandle.

The slow-moving storm caused West Texas Intermediate crude oil to climb $1.88 to $40.16 a barrel and RBOB gasoline to jump 5.08 cents to $1.88 a gallon as a number of refineries were at risk of flooding and remaining idled.

A decision, seen as imminent, by The Committee on Foreign Investment in the United States (CFIUS) on Oracle Inc.’s “trusted tech partnership” with Chinese-owned social media app TikTok, was confirmed by President Trump late Tuesday, as he praised CEO Larry Ellison, a longtime friend, and supporter.

Nikola Corp. shares rose as investors continued to digest a report from short-seller Hindenburg Research that accused the electric-truck maker of fraud. Nikola, which has called the claims “false and deceptive” is under investigation from the U.S. Securities and Exchange Commission. Rival Tesla saw its shares decline.

Elsewhere, Eli Lily reported its COVID-19 antibody treatment’s mid-stage trial reduced the hospitalization rate for patients diagnosed with mild or moderate cases.

A law firm hired by the Eastman Kodak Co.’s board of directors said securities transactions made by CEO Jim Continenza upon learning about a $765 million government loan to aid a pivot into producing generic drug ingredients did not violate internal policies. The situation remains under investigation by the U.S. regulators and Congress.

Dow component Boeing Co. made a number of missteps in the certification of the 737 Max aircraft that lead to two deadly crashes, according to an 18-month long investigation conducted by a U.S. House panel.

Looking at earnings, FedEx Corp.’s quarterly profit rose 60% from a year ago to $4.87 a share, boosted by a surge in online shopping due to COVID-19. The parcel delivery service said it will raise shipping rates by 4.9% to 5.9%, beginning in January.

U.S. Treasurys were little changed with the yield on the 10-year note holding near 0.686%.

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European markets were quiet with Britain's FTSE off 0.44%, Germany’s DAX up 0.29% and France’s CAC higher by 0.13%.

In Asia, Japan’s Nikkei edged up 0.09% as Yoshihide Suga was elected the country’s prime minister. Elsewhere in the region, Hong Kong’s Hang Seng slipped 0.03% and China’s Shanghai Composite shed 0.36%.