US stocks churn amid uncertainty about how many more rate cuts are coming from the Fed

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NEW YORK (AP) — U.S. stocks churned between gains and losses on Wednesday but ultimately remained near their record levels.

The S&P 500 slipped 0.1% and hung near its all-time high set at the start of the week. The Dow Jones Industrial Average rose 260 points, or 0.6%, while the Nasdaq composite fell 0.3%.

The swings came after the Federal Reserve cut its main interest rate for the first time this year. That move was no surprise for Wall Street, which was widely expecting it. More important was the set of projections that Fed officials published showing where they expect interest rates to go in upcoming years.

That indicated the typical member sees the Fed cutting the federal funds rate two more times by the end of this year and once more in 2026.

Stocks initially rose following the release of the projections, which seemed to support Wall Street’s widespread expectation for more cuts to interest rates. Such moves can give the economy a kickstart, and stock prices had already run to records on the bet that several cuts are on the way.

But stocks gave back gains after Fed Chair Jerome Powell stressed that they’re only projections. Conditions could change quickly, and Powell warned against taking the projections as gospel.

“It’s such an unusual situation,” Powell said, saying later that “there is no risk-free path” that the Fed should obviously take with interest rates.

What’s making things difficult for the Fed is that the job market is slowing at the same time that inflation is remaining stubbornly high. The Fed is in charge of fixing both, but it has only one tool to do that. And helping one by moving interest rates often hurts the other in the short term.

The Fed had been holding rates steady this year because of the threat that President Donald Trump’s tariffs will raise prices for all kinds of products. Inflation has so far refused to go back below the Fed’s 2% target, and Fed officials don’t see that happening for a few years.

But discouraging reports on the job market mean inflation may no longer be the Fed’s No. 1 problem, or at least not by such a clear margin. “I would say they’re moving toward equality,” Powell said about the two risks.

Stocks swiveled several times as Powell spoke, and the movements were particularly jarring for the smallest stocks on Wall Street.

Smaller companies can get the biggest benefit from easier interest rates because of their need to borrow money to grow and compete with bigger rivals. Shortly after the Fed released its projections, the Russell 2000 index of smaller stocks surged more than 2% and was on track to surpass its all-time high, which was set in 2021. But it later pared its gain to a rise of 0.2%.

Lyft helped lead the market and drove 13.1% higher after saying it will bring autonomous ride-hailing service to Nashville with Waymo.

Workday rose 7.2% after Elliott Investment Management said it’s built a stake of more than $2 billion in it and supports its management. The company, which helps customers manage their finances and human resources, recently increased its program to send cash to investors through purchases of its stock by up to $4 billion.

The heaviest weights on the market, meanwhile, were Big Tech stocks. Nvidia fell 2.6%, and Broadcom sank 3.8%, for example. They’ve been some of the biggest reasons Wall Street has set records recently, benefiting from the frenzy around artificial-intelligence technology, almost regardless of what interest rates were doing.

RCI Hospitality Holdings dropped 10.4% after New York’s attorney general accused executives of bribery and other crimes for trying to avoid paying millions of dollars in sales taxes. RCI owns strip clubs and sports bars across the country, including Rick’s Cabaret.

Online ticket marketplace StubHub slumped 6.4% from its initial public offering price of $23.50 in its debut on the New York Stock Exchange.

All told, the S&P 500 fell 6.41 points to 6,600.35. The Dow Jones Industrial Average rose 260.42 to 46,018.32, and the Nasdaq composite fell 72.63 to 22,261.33.

In stock markets abroad, indexes were mixed across Europe and Asia.

Japan’s Nikkei 225 slipped 0.2% from its record after data showed Japan’s exports to the U.S. dropped 13.8% in August from a year earlier, as auto exports were hit by Trump’s tariffs.

In the bond market, the yield on the 10-year Treasury rose to 4.07% from 4.04% late Tuesday. It had briefly dropped below 4% immediately after the Fed released its projections for where interest rates are heading.

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AP Business Writers Yuri Kageyama and Matt Ott contributed.