US stocks churn amid uncertainty about how many more rate cuts are coming from the Fed

NEW YORK (AP) - U.S. stocks churned between gains and losses, but they ultimately remained near their record levels. The S&P 500 fell 0.1% Wednesday and hung near its record set at the start of the week. The Dow Jones Industrial Average rose 260 points, or 0.6%, while the Nasdaq composite fell 0.3%.

Stocks initially rose and bond yields fell after officials at the Federal Reserve indicated they may cut interest rates several more times by the end of 2026. But they snapped back after Fed Chair Jerome Powell warned not to take the projections as gospel.

THIS IS A BREAKING NEWS UPDATE. AP's earlier story follows below.

NEW YORK (AP) - U.S. stocks are churning between gains and losses on Wednesday amid uncertainty about how many more of the cuts to interest rates that Wall Street loves are on the way.

The S&P 500 slipped 0.1% and was hanging near its record set at the start of the week. The Dow Jones Industrial Average was up 230 points, or 0.5%, with less than an hour remaining in trading, while the Nasdaq composite was 0.2% lower.

The swings came after the Fed cut its main interest rate for the first time this year. That move was no surprise for Wall Street, which was widely expecting it. More important was the set of projections that Fed officials published showing where they expect interest rates to go in upcoming years.

That indicated the typical member sees the Fed cutting the federal funds rate two more times by the end of this year and once more in 2026.

Stocks initially rose following the release of the projections, which seemed to support the widespread expectation on Wall Street for more cuts to interest rates. Such cuts can give the economy a kickstart, and stock prices had already run to records on the bet that several are on the way.

But stocks gave back gains after Fed Chair Jerome Powell stressed that they’re only projections. Conditions could change quickly, and Powell warned against taking the projections as gospel.

"It’s such an unusual situation," Powell said, saying later that "there is no risk-free path" that the Fed should obviously take with interest rates.

What’s making things difficult for the Fed is that the job market is slowing at the same time that inflation is remaining stubbornly high. The Fed is in charge of fixing both, but it has only one tool to do that, and helping one by moving interest rates often hurts the other in the short term.

The Fed had been holding rates steady this year because of the threat that President Donald Trump's tariffs will raise prices for all kinds of products. Inflation has so far refused to go back below the Fed's 2% target, and Fed officials don’t see that happening for a few years.

But several discouraging reports on the job market recently mean inflation may no longer so clearly be the Fed’s No. 1 problem. "I would say they're moving toward equality," Powell said about the two risks.

Stocks swiveled several times as Powell spoke, and the movements were particularly jarring for the smallest stocks on Wall Street.

Smaller companies can get the biggest benefit from easier interest rates because of their need to borrow money to grow and compete with bigger rivals. Shortly after the Fed released its projections, the smaller stocks in the Russell 2000 index surged more than 2% and were on track to surpass the index’s all-time high, which was set in 2021. But it later pared its gain to a rise of 0.5%.

Lyft drove 14% higher after saying it will bring autonomous ride-hailing service to Nashville with Waymo.

Workday rose 6.7% after Elliott Investment Management said it's built a stake of more than $2 billion in it and supports its management. The company, which helps customers manage their finances and human resources, recently increased its program to send cash to investors through purchases of its stock by up to $4 billion.

The heaviest weights on the market, meanwhile, were Big Tech stocks. Nvidia fell 2.5%, and Broadcom sank 3.3%, for example. They’ve been some of the biggest reasons Wall Street has set records recently, benefiting from the frenzy around artificial-intelligence technology, almost regardless of what interest rates were doing.

RCI Hospitality Holdings dropped 10.1% after New York's attorney general accused executives of bribery and other crimes for trying to avoid paying millions of dollars in sales taxes. RCI owns strip clubs and sports bars across the country, including Rick's Cabaret.

Online ticket marketplace StubHub slumped 5.6% from its initial public offering price of $23.50 after its shares began trading on the New York Stock Exchange for the first time.

In stock markets abroad, indexes were mixed across Europe and Asia.

Japan's Nikkei 225 slipped 0.2% from its record after data showed Japan's exports to the U.S. dropped 13.8% in August from a year earlier, as auto exports were hit by Trump's tariffs.

In the bond market, the yield on the 10-year Treasury rose to 4.05% from 4.04% late Tuesday. It had briefly dropped below 4% immediately after the Fed released its projections for where interest rates are heading.