Federal Reserve Chair Jerome Powell's recent comments on trade risks and economic projections have cast a shadow over investor sentiment, contributing to the downward pressure on the S&P 500 Index. Despite the Fed's anticipated rate cut, which typically aims to boost economic activity, the market's response has been lukewarm. This cautious reaction is further compounded by concerns over potential policy changes from the Trump administration, including tariffs, which introduce uncertainty and could lead to increased volatility. The recent pullback in stocks, particularly among small-cap companies sensitive to interest rates, underscores the market's apprehension.
The Vanguard S&P 500 ETF (VOO) experienced a decline, falling 2.40% to $542.13 by 4:00 PM on Wednesday, December 18.