US stocks hold their losses after the Federal Reserve opts again not to cut interest rates

Stocks held onto their losses after the Federal Reserve decided to keep its main interest rate steady, instead of resuming cuts meant to give the job market and economy a boost. Fed officials, though, did indicate they could lower rates once by the end of the year, the same as they were signaling before the war began.

Worries had been rising that the Fed could indicate zero cuts for 2026 given how much oil prices have soared. A barrel of Brent crude has jumped from roughly $70 per barrel to as high as $109.95 on Wednesday. The price for a barrel of benchmark U.S. crude got as high $98.67 before receding to $94.60, down 1% from a day before.

Oil and natural gas prices have spiked because of the war's disruptions to the Persian Gulf's energy industry. Iran’s state television said Wednesday that the Islamic Republic would be attacking oil and gas infrastructure in Qatar, Saudi Arabia and the United Arab Emirates after an attack on facilities associated with its offshore South Pars natural gas field.

If the disruptions keep oil and gas prices high for long, they could send a debilitating wave of inflation crashing into the global economy.

A report released Wednesday morning showed that inflation pressures were already worsening before the war began. It said inflation at the U.S. wholesale level unexpectedly accelerated last month to 3.4%, and those cost increases could hit U.S. households if producers pass them all along.

Such numbers were likely factors in staying the Fed's hand on Wednesday. A cut to rates would have given the economy and investment prices a boost, and President Donald Trump has been angrily calling for them. But lower interest rates would also worsen inflation.

Only one Fed voter wanted to lower rates this time around, and the tally was 11-1 to keep rates steady.

The Iran war has made it difficult for anyone to make economic forecasts. Gasoline prices are soaring and will push up inflation for at least the next month or two. The average price for a gallon of gasoline spiked again overnight, reaching $3.84. It was well under $3 last month.

Global oil flows remain largely constrained, ING Bank analysts Warren Patterson and Ewa Manthey wrote in a research note on Wednesday, even as hopes were growing that Iran might be allowing more vessels through the Strait of Hormuz, a key waterway for global oil and gas transport.

Roughly a fifth of the world’s crude oil passes through the strait, which has been largely closed as Iran blocks ships linked to the U.S., Israel and their allies.

On Wall Street, mixed profit reports helped keep the market in check.

Macy’s jumped 4% after reporting stronger profit and revenue for the latest quarter than analysts expected. The retailer behind Bloomingdale’s and Bluemercury is in the midst of a turnaround plan to drive growth under CEO Tony Spring.

But General Mills fell 3.1% after the company behind the Pillsbury, Progresso and Wheaties brands reported a weaker profit for the latest quarter than analysts expected. CEO Jeff Harmening is investing in its brands in hopes of driving growth, and it’s sticking with its forecast for profit over the full fiscal year.

In the bond market, Treasury yields ticked higher following the higher-than-expected update on inflation at the wholesale level. The yield on the 10-year Treasury rose to 4.21% from 4.20% late Tuesday and from just 3.97% before the war with Iran started.

In stock markets abroad, indexes fell in Europe following a stronger finish in Asia. They reacted to the rise in the price of crude, which accelerated as trading headed westward around the world.

Tokyo’s Nikkei 225 rallied 2.9% after the government reported exports in February were higher than expected. South Korea’s Kospi leaped 5%.

AP Business Writers Chan Ho-him and Matt Ott contributed.