US equities retreat as Powell dampens Fed interest rate cut hopes

US STOCKS closed well off earlier highs after a choppy session on Wednesday, as US Federal Reserve Chair Jerome H. Powell chilled expectations the central bank might be poised to cut rates at its September meeting.

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In keeping rates unchanged, as was widely expected, the central bank said “the unemployment rate remains low, and labor market conditions remain solid. Inflation remains somewhat elevated,” in a split decision that saw two governors dissent.

Stocks were modestly higher before the Fed statement as investors assessed the first reading of second-quarter economic growth, which was stronger than expected, but underlying details indicated an economy that was likely losing strength.

However, stocks retreated after Mr. Powell said it was too soon to say whether the Fed would cut rates at its next meeting in September and noted that current policy was modestly restrictive but has not been holding back the economy.