MARKET SNAPSHOT

U.S. stocks were mostly lower, bond yields and the dollar rose and gold prices slipped as the Federal Reserve maintained rates but was split over the outlook for lower interest rates. Oil prices jumped as the stalemate between the U.S. and Iran wore on.

MARKET WRAPS

EQUITIES

The Dow Jones Industrial Average slipped, bond yields rose and energy prices touched wartime highs as Jerome Powell took the podium for the last time as Federal Reserve chair and warned that inflation would likely rise in the months to come.

"It hasn't even peaked yet," Powell said during a Wednesday afternoon press conference. "There's headline inflation coming out of the Gulf and we don't know how much that will be."

Rising prices top the list of challenges that will confront Kevin Warsh as the nominee for Powell's successor advances toward confirmation. A stalemate over access to the Strait of Hormuz, a key Persian Gulf waterway through which 20% of the world's oil passes, has pressured markets, lifted the cost of oil and compelled the Fed to keep interest rates unchanged Wednesday.

The sharp rise in energy prices overshadowed the Fed decision in many parts of the market, after The Wall Street Journal reported that President Trump has told aides to prepare for an extended blockade of Iran.

The shock to energy prices is, for now, the main variable affecting the cost of borrowing, said David Krakauer, vice president of portfolio management at Mercer Advisors. Investors have all but given up on any Fed rate cuts this year.

"It all comes back to the Strait of Hormuz," Krakauer said. "Little by little, week after week, month after month, we certainly expect this to have an impact on the economic numbers coming out and the overall momentum of the economy."

Major indexes finished mixed, with the Dow industrials losing 0.6%, the S&P 500 slipping less than 0.1% and the Nasdaq composite gaining less than 0.1%, after the Fed's rate decision revealed deepening divisions at the central bank. Three Fed officials objected to its policy statement on the basis that it suggested that rate cuts were more likely than a rate hike in the months ahead. A fourth official dissented in the opposite direction, backing a rate cut.

Earlier Wednesday, Asian markets ended mixed as hopes for an increase in oil supply from the United Arab Emirates' withdrawal from OPEC countered the sustained blockade of the Strait of Hormuz.

Rare-earths stocks rose in China and Hong Kong after Beijing said it would tighten scrutiny over production. China's Shanghai Composite ended 0.7% higher and the Shenzhen Composite Index climbed 1.7%. The tech-focused ChiNext Price Index jumped 2.5%.

Hong Kong's Hang Seng Index rose 1.7% amid a flurry of company earnings.

South Korea's Kospi closed 0.8% higher, led by energy stocks.

Meanwhile, Singapore's FTSE Straits Times Index fell 0.5%.

Stocks in Australia slipped, as the S&P/ASX 200 Benchmark Index edged 0.3% lower. New Zealand's S&P/NZX 50 Index held steady.

Markets in Japan were closed for a public holiday.

COMMODITIES

Oil futures jumped with front-month Brent testing a four-year intraday high on prospects of a prolonged standstill in negotiations between the U.S. and Iran.

"All parts of the energy complex appear poised for higher prices with an eventual price top still difficult to define," Ritterbusch & Associates said.

U.S. inventory data added upside pressure with large draws in crude and products stocks and a record 6.4 million barrels a day in crude exports.

"While this strong pace may be difficult to maintain amid loading and logistical issues, we feel that exports have shifted into a new and higher trading range," Ritterbusch added.

WTI surged 7% to $106.88 a barrel and Brent jumped 6.1% to $118.03.

A Fed decision that saw four board members dissent, 3 of which backed the exclusion of language that normally signals a rate cut being more likely in the future, hit precious metals.

Markets settled lower before the decision, at 1:30 p.m. ET, but in trading since then futures fell further.

For gold, fundamentals reported by the World Gold Council signal what the WGC calls "gold's resilience" even as the metal comes off of historically high price levels. The WGC says that uncertainty surrounding the war in the Middle East and the next steps of the Fed ultimately mean higher prices ahead for gold.

Front-month gold settled down 1% to $4,545.20/oz, and silver fell 2.3% to $71.569/oz.

TODAY'S TOP HEADLINES

Fed Closes Powell Era With Rates on Hold and Divide Over What Comes Next

WASHINGTON-Federal Reserve Chair Jerome Powell said Wednesday he would stay on the central bank's board after his chairmanship ends next month to defend the institution from what he called unprecedented legal attacks from the Trump administration-a decision that departs from decades of precedent and that overshadowed deepening divisions over the path for interest rates.

Powell announced his decision Wednesday after officials extended an interest-rate pause but split over whether to continue hinting at further rate cuts, an uncharacteristically contentious end to Powell's eight-year chairmanship.

His term as chair ends May 15 but a separate term as governor allows Powell to remain at the Fed until early 2028. For decades, Fed chairs have left the building when their successor is installed.

Oil Tops $110 a Barrel After Trump Warns 'No More Mr. Nice Guy' With Iran

Oil prices spiked Wednesday after President Donald Trump appeared to suggest the possibility that U.S. military action would resume against Iran and told Axios that he would maintain the U.S. naval blockade until there's a deal on Iran's nuclear program.

"Iran can't get their act together. They don't know how to sign a nonnuclear deal. They better get smart soon!," Trump posted on social media, accompanied by an image of himself with the slogan "No More Mr. Nice Guy".

Meanwhile Iran's ambassador to the United Nations, Saeed Iravani, urged the Security Council to condemn "piracy-style seizure and deliberate targeting" of Iranian oil tankers.

Google Reports 81% Jump in Profits, Beating Wall Street Expectations

Google parent company Alphabet reported a 22% surge in first-quarter revenue as the artificial intelligence race fuels growth of its cloud business.

Alphabet's sales reached about $110 billion, exceeding analyst expectations. Net income was $62.6 billion, an 81% increase compared with the same period a year earlier.

The company reported a record $403 billion in sales in 2025. Profits reached about $132 billion last year.

Meta Reports Big Revenue Jump and Projected Spending Increase

Meta Platforms posted its biggest quarterly revenue jump in recent history in the first quarter but said it would spend even more money to build out AI data centers this year than it had forecast.

The company said it brought in $56.3 billion in sales, a 33% year over year increase, and net income of $26.8 billion. Both sales and net income came in ahead of analyst expectations.

Meta's stock was down more than 5% in after-hours trading.

Microsoft Reports Strong Cloud Growth, But Questions About AI Returns Persist

Microsoft reported robust cloud growth of 40% that failed to allay investor concerns about how it will convert its massive bet on AI infrastructure into reliable profits.

Sales reached $82.9 billion, an 18% increase from the March quarter a year ago, and net income was $31.8 billion. Both sales and net income exceeded Wall Street expectations.

Shares fell by more than 2% in after-hours trading, a sign that market fears remain about the direction of the artificial-intelligence boom. Growth in the company's Azure cloud business reached 40%, in line with expectations, and its capital spending was about $31.9 billion, more than 8% lower than projections.

Amazon.com Posts Double-Digit Growth Anchored by Booming Web Services

Amazon.com said Wednesday that revenue and profit rose in the first quarter, fueled by growing AI services and cloud sales.

Revenue for the period rose 17% to $181.5 billion, while net profit increased a sharp 77% to $30.3 billion, which Amazon attributed to pretax income from its investment in Anthropic. Both figures beat analyst estimates, according to FactSet.

Revenue from the Amazon Web Services cloud business, the source of much of the company's profits, grew 28% from a year earlier.

Qualcomm Second-Quarter Sales Rise on Automotive, Internet of Things Growth

Qualcomm logged higher revenue in its latest quarter, boosted by growth in its automotive and internet of things segments, as it contends with pressure from a shortage of memory supply.

The semiconductor company also gave a forecast for the current quarter that came in below Wall Street's expectations.

The stock fell 2.7%, to $151.88, in after-hours trading.

Ford Stock Rises on Strong Earnings. Trucks Are a Luxury Good.

In this economy, it's good to be a seller of luxury goods. It turns out that trucks are luxury goods, which helped Ford Motor smash earnings expectations.

Ford shares were up in after-hours trading.

Wednesday evening, Ford reported a first-quarter operating profit of $3.5 billion from sales of $43.3 billion. Wall Street is looking for an operating profit of $1.3 billion from sales of $42.7 billion. A year ago, Ford reported an operating profit of $1 billion from sales of $40.7 billion.