Wall Street closed sharply lower on Wednesday after the Federal Reserve left interest rates unchanged, a decision that did little to calm investors already weighing growth, inflation and borrowing-cost risks. The market move reflected a cautious tone as traders reassessed expectations for the economy and the path of monetary policy.
Technology shares were a major source of pressure, with AI-linked chip companies extending recent losses ahead of closely watched quarterly results from major tech names. The pullback suggested investors were becoming more selective after a long stretch of enthusiasm around artificial intelligence and related spending.
After regular trading ended, Meta shares fell about 4% in extended trading. The decline came after the company said it expects 2026 capital expenditures to come in higher than previously estimated, highlighting how much money large technology companies may continue to commit to AI infrastructure and other long-term investments.
Taken together, the Fed's steady-rate decision, weakness in chip stocks and Meta's spending outlook added to a risk-off session for U.S. equities. The market response showed that even with rates on hold, investors remain sensitive to earnings, spending plans and signs that AI investment could keep costs elevated for the sector.
