US stocks erase gains, close lower despite interest rate cut

US stocks erased early gains after the Federal Reserve ended its monetary tightening cycle at its Sept. 17-18 meeting amid concerns that a soft-landing scenario, where inflation falls without a recession, may not materialize.

Dow Jones Industrial Average fell 0.25%, or 103 points, to 41,503 points after reaching a record level of 41,981 points.

The S&P 500 index also dropped by 0.3%, or 16 points, to 5,618 points after hitting a record level of 5,689 points. The Nasdaq index lost nearly the same percentage, or 54 points, to close at 17,573 points.

In Europe, the STOXX Europe 600 index retreated by 0.5% to 514.5 points, while losses were limited by the gains in the energy and automobile sectors.

The British FTSE 100 index closed lower by 0.7% to 8,253 points, while the French CAC 40 decreased 0.55% to close at 7,444 points. The German DAX index inched down 0.1% to 18,711 points.

In Japan, the Nikkei index rose 0.5%, or 177 points, to 36,380 points, and the broader TOPIX index gained 0.4% to 2,565 points.

In the oil market, futures contracts for Brent crude for November delivery fell by less than 0.1%, or $0.5, to $73.65 per barrel, after approaching $72.31.

Meanwhile, prices of West Texas Intermediate (WTI) crude oil for October delivery retreated by 0.4%, or $0.28, to $70.91 per barrel, after the earlier drop to $69.73.

As for gold, futures prices for the yellow metal for December delivery added 0.25%, or $6.2, to $2,598.6 per ounce.

Meanwhile, Fed policymakers decided to cut interest rates by 50 basis points (bps) to a range between 4.75% and 5%, expecting a similar step before the end of the year.

This cut, however, raised investors' concerns that this was an attempt by the central bank to avoid a possible recession in the world's largest economy.

Despite the statement of Jerome Powell, the Chairman of the Federal Reserve, that "I do not see anything in the economy right now that suggests the likelihood of a recession," treasury bond yields rose after the press conference to put pressure on US stock indices.