The Dow Jones Industrial Average edged lower on Wednesday as investors reacted to the Federal Reserve’s decision to maintain interest rates unchanged and a persistent "Neutral" reading from the CNN Money Fear & Greed Index. The index, currently at 53.5, reflects the prevailing market sentiment, with a reading of 61.5 recorded the previous day. This "Neutral" zone suggests a lack of strong bullish or bearish momentum, indicating investors are cautiously awaiting further developments. Traders weighed geopolitical uncertainty, particularly the escalating Israel-Iran conflict, with President Donald Trump offering no direct comment on potential U.S. intervention. The Dow closed down approximately 44 points at 42,171.66, while the S&P 500 dipped slightly by 0.03% to 5,980.87 and the Nasdaq Composite gained 0.13% to 19,546.27. Despite the overall market’s mixed performance, certain sectors demonstrated resilience. Information technology and utilities stocks recorded gains, while energy, materials, and communication services stocks experienced the most significant losses.

Key economic data released during the session revealed a decline in U.S. initial jobless claims, which fell by 5,000 to 245,000, aligning with market expectations. However, housing starts saw a notable decrease, dropping 9.8% month-over-month to an adjusted annual rate of 1.256 million units in May, signaling potential headwinds for the construction sector. Investors are keenly focused on upcoming earnings reports from prominent companies including Accenture plc (ACN), CarMax, Inc. (KMX), and The Kroger Co. (KR), anticipating insights into corporate performance and future outlooks. The Fear & Greed Index, a crucial barometer of market sentiment, operates on the principle that heightened fear exerts downward pressure on stock prices, while increased greed has the opposite effect. Calculated using seven equal-weighted indicators, the index spans a range from 0 to 100. A reading of 0 represents maximum fear, while 100 indicates maximum greediness. Understanding this index is vital for gauging market psychology and anticipating potential shifts in investor behavior.

The index’s current reading of 53.5 reflects a temporary equilibrium, suggesting that neither extreme fear nor excessive greed dominates the market landscape. This cautious stance is likely to persist until more concrete information emerges regarding the conflict in the Middle East and the overall economic outlook. Benzinga continues to provide comprehensive market analysis and investment insights to help investors navigate the complexities of the financial markets. Stock Score Locked: Edge Members Only Benzinga Rankings give you vital metrics on any stock – anytime. © 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.