Nasdaq tops 10,000, but stocks end lower

Stocks closed a choppy day on Wall Street with broad losses Wednesday, despite fresh assurances from the Federal Reserve that it would keep interest rates low through 2022 and would continue buying bonds to help markets function smoothly.

The S&P 500 fell 0.5 percent, extending losses from a day earlier. The benchmark index had briefly climbed 0.5 percent following the release of the central bank’s latest policy statement.

Most sectors finished lower, but a surge in technology sector helped push the Nasdaq above 10,000 for the first time, giving the index its third record high close in a row. Bond yields were broadly lower, reflecting caution among investors.

The Fed has cut its benchmark short-term rate to near zero as part of a historic effort to gird the stock market and U.S. economy from the coronavirus pandemic’s economic ravages. The central bank made clear Wednesday that it will keep providing support by buying bonds to maintain low borrowing rates.

It also forecast no rate boost through 2022, which could make it easier for consumers and businesses to borrow and spend enough to sustain an economy depressed by business shutdowns and high unemployment.

The move to leave its key interest rate unchanged wasn’t a surprise to investors, but the fact that nearly all of the members of the central bank’s Federal Open Market Committee foresee no rate increase through 2022 was noteworthy, said Brian Nick, chief investment strategist at Nuveen.

“What you have on the FOMC is unanimity that rates ought to stay low and that their communication should continue to emphastocks size that they’re not going to raise interest rates, absent a material improvement in the economy,” he said.

The combination of low interest rates and low inflation has been a key driver for gains in big technology companies that can grow almost regardless of the economy.

“That’s been the magic formula for growth stocks,” Nick said.

The S&P 500 dropped 17.04 points to 3,190.14. The Dow Jones Industrial Average fell 282.31 points, or 1 percent, to 26,989.99. The Nasdaq composite gained 66.59 points, or 0.7 percent, to 10,020.35. Small company stocks bore the brunt of the selling. The Russell 2000 index lost 39.66 points, or 2.6 percent, to 1,467.39.

Oil prices rose. Benchmark U.S. crude oil for July delivery rose 1.7 percent to settle at $39.60 a barrel. Brent crude oil for August delivery rose 1.3 percent to $41.73 a barrel.

Wall Street has been generally rising since late March, at first on relief following emergency rescues by the Fed and Congress. More recently, investors have begun piling into companies that would benefit most from a reopening economy that’s growing again.