The Dow Jones Industrial Average closed lower on Wednesday as oil prices extended their rally following a U.S. blockade of Iranian ports, while the Federal Reserve kept interest rates unchanged. Investors also remained focused on upcoming earnings from four of the “Magnificent Seven” companies.
The 30-stock index dropped 280.12 points, or 0.57%, to settle at 48,861.81, marking its fifth straight day of losses. Meanwhile, the S&P 500 slipped 0.04% to 7,135.95, while the Nasdaq Composite edged up 0.04% to 24,673.24.
Oil prices climbed again after reports suggested President Donald Trump is preparing for a prolonged blockade of Iran. Gains accelerated after further reports indicated the U.S. rejected Iran’s proposal to reopen the Strait of Hormuz, maintaining pressure until a broader nuclear agreement is reached.
U.S. West Texas Intermediate crude rose 7.17% to $107.16 per barrel, while Brent crude advanced 6.78% to $118.80.
Fed Chair Jerome Powell noted that higher oil prices are likely to push inflation higher in the near term, following the Federal Reserve’s decision to hold rates steady within the 3.5%–3.75% range. The decision saw an 8–4 split, the largest number of dissents since 1992, reflecting differing views among policymakers.
This meeting could be Powell’s final one as Fed chair before his term ends in May, though he indicated he will remain on the Board of Governors. Kevin Warsh, nominated by Trump, is expected to succeed him. Markets had largely anticipated no change in rates.
Looking ahead, investors are watching earnings from Alphabet, Amazon, Meta Platforms, and Microsoft, with expectations running high for results that justify heavy spending on artificial intelligence.
In the tech space, sentiment had been weighed down earlier by reports that OpenAI missed its internal revenue and user growth targets. However, some chipmakers bucked the trend, with Seagate Technology and NXP Semiconductors surging more than 11% and 25%, respectively, after delivering strong earnings and upbeat guidance.
