Investing.com-- The S&P 500 closed lower Thursday as optimism that followed the Federal Reserve’s unchanged outlook on two rate cuts this year run out of steam.

At 4:00 p.m. ET, the Dow Jones Industrial Average fell 11 points, or 0.03%, the S&P 500 index fell 0.3%, and the NASDAQ Composite fell 0.30%. 

The main Wall Street indexes rose strongly during Wednesday’s session, but all three indexes remained close to six-month lows, as uncertainty over Trump’s tariffs and fears of slowing economic growth sparked a wave of extended selling. 

Labor market data post Fed meeting

The number of Americans filing for first-time unemployment benefits edged marginally higher last week, suggesting ongoing resilience in the U.S. labor market despite possible headwinds looming from escalating trade tensions and a Trump administration push to downsize the federal government.

Initial jobless claims, a proxy for hiring, inched up to 223,000 in the week ended on March 15, increasing from an upwardly-revised mark of 221,000, according to Labor Department data on Thursday. Economists had seen the figure at 224,000.

The Fed kept its benchmark interest rate unchanged at 4.25% to 4.5% on Wednesday, as widely expected, leaving it there for a second consecutive meeting. 

The central bank maintained its outlook that rates will fall to 3.75% to 4% in 2025, suggesting that it will cut rates twice by December. 

But this came even as the central bank forecast higher inflation in 2025, with core personal consumption expenditures index- the Fed’s preferred inflation gauge- expected to be 2.8% in 2025, up from a prior forecast of 2.5% and well above the central bank’s annual 2% target.

The Fed also trimmed its gross domestic product forecast for the year, and flagged growing uncertainty over the impact of Trump’s policies on the economy. 

Fed Chair Jerome Powell said it was still too soon to gauge the impact of Trump’s tariff policies on inflation and the economy at large. But the Fed’s inflation and GDP targets suggest that the impact will not be negligible. 

Apple (NASDAQ:AAPL) set to shake up executive ranks in AI push; Tesla flat on Cybertruck recall, Microchip Technology down on debt offering

Apple reportedly is set looking to tap Vision Pro creator Mike Rockwell to turn around Siri as the tech giant seeks to boost its foray into AI, Bloomberg reported, citing unnamed sources. The move comes as CEO Tim Cook has reportedly lost confidence in AI head John Giannandrea to execute on product development. Its shares fell 0.5%.

Tesla Inc (NASDAQ:TSLA) cut losses to end flat fespite after the EV maker recalling almost all Cybertrucks in the United States to fix an exterior panel that could delaminate and detach, increasing the risk of a crash. 

Microchip Technology Inc (NASDAQ:MCHP) fell 6.5% after announcing late Wednesday plans to sell $1.35 billion of convertible stock to raise funds to repay existing debt enter into capped call transaction. 

Earnings on tap

On the earnings calendar, investors will have the chance to parse through quarterly results from a range of companies later in the day, including logistics group FedEx (NYSE:FDX), chipmaker Micron Technology (NASDAQ:MU) and shoe seller Nike (NYSE:NKE).

Elsewhere, Five Below (NASDAQ:FIVE) stock rose 0.6% after the discount store company reported better-than-expected fourth-quarter results and forecast a strong current quarter.

Darden Restaurants (NYSE:DRI) stock rose more than 5% after the restaurant operator reported third-quarter fiscal 2025 results.

(Ambar Warrick contributed to this article.)