Dow Jones Forecast: Industrial Average Slips Before Powell’s Fed Outlook

Dow Slips in Early Trade as Traders Eye GDP Strength and Fed Outlook

The Dow Jones Industrial Average was down 57 points, or 0.13%, to 44,575.73 just before the mid-session Wednesday, as traders digested a strong GDP report and positioned ahead of the Federal Reserve’s interest rate decision. The Nasdaq rose 0.23% and the S&P 500 edged up 0.04%, highlighting a cautious but steady tone in early trading.

Will the Federal Reserve Hold Rates Steady This Afternoon?

Markets are pricing in a 98% chance the Fed will keep its benchmark rate at 4.25%–4.5%. Attention now shifts to Jerome Powell’s press conference at 18:30  GMT, where traders will parse his tone for any hint of policy moves ahead.

Despite renewed political pressure to lower borrowing costs, Powell has signaled a patient approach. As of now, expectations for a rate cut remain focused on later this year.

Which Dow Stocks Are Pressuring the Index?

Declines in Nike (-2.22%), Chevron (-1.23%), and Procter & Gamble (-1.10%) pulled the Dow into the red. Financials were mixed, with JPMorgan gaining 0.73% and Visa dipping 2% despite strong results. Caterpillar led Dow advancers, up 0.78%. Energy stocks dragged on the broader tape, down 1.09% as crude prices softened. Consumer Staples and Materials also underperformed, while Technology and Utilities showed modest strength.

Outside the Dow, Starbucks surged 5% on stronger-than-expected revenue, boosting confidence in its turnaround strategy. The pop offered a bright spot in an otherwise rangebound tape, as traders remain selective ahead of tech earnings.

How Are Traders Reacting to the GDP Surprise?

Second-quarter U.S. GDP rose at a 3% annual rate, well ahead of the 2.3% estimate. But the beat did little to lift sentiment in early trade. Most focus remains locked on the Fed and geopolitical developments. U.S.–China trade negotiations have stalled, with no clarity yet on whether planned tariff increases will be delayed. President Trump reaffirmed a hard deadline for Friday and also moved to impose a 25% tariff on Indian imports.

What’s the Early Read for the Rest of the Session?

With the Fed decision hours away, the session could remain subdued until Powell speaks. Any dovish shift could spark upside, especially in tech and growth names.

Traders are also watching for earnings from Microsoft and Meta after the close.

As the Dow lags early, rate commentary and trade news will likely set the tone for the back half of the day.

More Information in our Economic Calendar.