US stocks experienced a decline on Thursday following a rally on Wednesday that was influenced by positive statements from Federal Reserve Chair Jerome Powell. The Nasdaq Composite was the biggest loser, dropping by approximately 0.5%, while the Dow Jones Industrial Average and the S&P 500 both saw losses of around 0.4%.

Although the Fed's decision to maintain interest rates was anticipated, the market reacted positively due to relief that the previous prediction of two rate cuts for the year remained intact. Concerns had been growing about the impact of President Trump's tariff plans on the economy and the uncertainty surrounding rate cuts.

During the press conference that followed the decision, Powell provided reassurance by stating that the effects of tariffs on inflation are likely temporary and that the risk of a recession is minimal. However, the Fed adjusted its projections by raising its inflation forecast at the end of the year while significantly lowering its economic growth forecast.

Trump, who had been relatively quiet on Fed policy, expressed his opinion on social media, suggesting that the Fed should lower rates as tariffs are being eased into the economy. This shift in sentiment comes as both the S&P 500 and Nasdaq have been under pressure in recent months, leading to a correction phase.