US stocks end midweek mixed amid oil rally, Fed decision

US stocks closed mixed on Wednesday, with the Dow Jones Industrial Average posting its fifth consecutive day of losses, as oil prices extended their rally and the Federal Reserve kept its key interest rate unchanged.

The blue-chip Dow Jones fell 0.57%, or 280.12 points, to end the day at 48,861.81, while the S&P 500 also declined 0.04%, or 2.85 points, to 7,135.95.

On the other hand, the Nasdaq composite slightly gained 0.04%, or 9.4 points, to end at 24,673.24.

Oil prices climbed sharply as concerns over Middle East supply risks intensified. US benchmark West Texas Intermediate crude futures rose about 8.5% to above $108 per barrel, while international benchmark Brent crude futures advanced around 8% to above $120 a barrel.

The rally came after reports said US President Donald Trump had instructed aides to prepare for an extended blockade of Iran. Oil prices gained further after reports that Trump rejected Tehran’s proposal to reopen the Strait of Hormuz, saying the US naval blockade would remain in place until an agreement addressing Washington’s concerns over Iran’s nuclear program is reached.

Investors also assessed the Fed’s latest policy decision. The Federal Open Market Committee voted 8-4 to hold the federal funds rate steady in a range of 3.5% to 3.75%, marking the highest level of dissent since 1992.

Fed Chair Jerome Powell said elevated oil prices would push up overall inflation in the near term, reinforcing market concerns that the central bank may be less inclined to cut rates soon.

He stated that the energy price surge has not yet peaked, warning that a prolonged oil shock could intensify its effect on the global economy and monetary policy outlook.

Powell said he has “no choice” but to stay on the Fed board after his chair term ends in May, citing legal actions taken by the Trump administration.

The 10-year US Treasury yield rose after the decision, gaining more than 5 basis points to 4.41%.

European stock markets

European stocks, meanwhile, closed lower, with the pan-European Stoxx 600 index falling 0.60% to 602.96 points.

France’s CAC 40 lost 0.39% to 8,072.13, Italy’s FTSE MIB 30 declined 0.51% to 47,796.03, and the UK’s FTSE 100 dropped 1.16% to 10,213.11.

Germany’s DAX 40 decreased 0.27% to close at 23,954.56, and Spain's IBEX 35 dropped 0.74% to 17,642.80.