Stocks gained after the Federal Reserve on Wednesday lowered its benchmark interest rate by a quarter percentage point.
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The Dow Jones Industrial Average fell to session lows, down more than 200 points following the decision, before charging into positive territory. The S&P 500 fell as much as 0.7 percent and the Nasdaq was down as much as 1 percent.
|I:DJI||DOW JONES AVERAGES||26833.95||+45.85||+0.17%|
|I:COMP||NASDAQ COMPOSITE INDEX||8119.792916||+15.50||+0.19%|
The Federal Reserve cut its benchmark interest rate by 25 basis points to a range between 1.75 percent and 2 percent after its July reduction was its first in a decade. The central bank cited weakening exports and low inflation as reasons for the cut.
"Job gains have been solid, on average, in recent months, and the unemployment rate has remained low," the central bank's monetary policy committee said in a statement. "Although household spending has been rising at a strong pace, business fixed investment and exports have weakened. On a 12-month basis, overall inflation and inflation for items other than food and energy are running below 2 percent."
Wednesday's decision came a day after the Federal Reserve Bank of New York took the unusual step of injecting $53 billion into markets to quell a spike in interest rates.
Bank of America, Citigroup, JPMorgan Chase and Wells Fargo all opened lower before reversing into positive territory following the Fed's decision.
|BAC||BANK OF AMERICA CORP.||31.42||+0.22||+0.71%|
|JPM||JP MORGAN CHASE & CO.||125.12||+0.33||+0.26%|
|WFC||WELLS FARGO & COMPANY||50.93||+0.31||+0.61%|
On the earnings front, FedEx was under pressure after reporting disappointing first-quarter results and slashing its full-year outlook due to higher costs, a slowing economy and lower revenue from severing ties with Amazon. Online-pet-food supplier Chewy.com was lower following its quarterly report.
Oil prices fell for a second straight day after Saudi Arabia's energy minister on Tuesday said half of its lost crude production had been restored. West Texas Intermediate crude oil was down 2.17 percent and Brent crude oil was lower by 1.64 percent to $58.05 and $63.49 a barrel, respectively.
In European trading, all of the major averages were little changed.
In Asia, Japan's Nikkei slipped 0.2 percent after the Japanese government reported exports fell for a ninth month in August, declining 8.2 percent in August from a year earlier.
FOX Business' Ken Martin contributed to this report.