US stocks close lower as Fed delivers largest rate cut in 16 years

​​​​​​​​​​​​​​By Ovunc Kutlu

ISTANBUL (AA) - Major US stock exchanges closed Wednesday with losses after the Federal Reserve delivered its largest interest rate cut in 16 years.

The Dow Jones industrial average fell 103 points, or 0.25%, to end the session at 41,503. The S&P 500 lost 16 points, or 0.29% to 5,618.

The Nasdaq Composite, meanwhile, declined 54 points, or 0.31%, to finish the day at 17,573.

The Fed lowered the interest rate by 50 basis points to the range of 4.75% - 5.0%, starting its monetary easing aggressively. The move marked the first cut by the central bank since the beginning of the coronavirus pandemic.

Except for the emergency rate cuts during the start of the pandemic, the last time the Fed delivered a rate cut of 50 basis points was during the global financial crisis in 2008.

The jumbo rate cut has raised concerns for investors that the central bank was trying to get ahead of a potential downturn in the US economy, or even a possible recession, and the bank is worried the labor market has been cooling too much in recent months that may lead to the unemployment rate climbing further.

The VIX volatility index, referred to as the "fear index," rose 3.5% to 18.23. The 10-year US Treasury yield added 1.8% to 3.710%.

The US dollar index increased 0.13% to 101.03, while the euro rose 0.05% against the dollar, trading at $1.1119.

Precious metals were on the decline. Gold lost 0.5% to $2,557 per ounce and silver fell 2.2% to $30.02.

Oil prices fell around 1%, with global benchmark Brent crude at $72.95 per barrel and US benchmark West Texas Intermediate at $69.17.