Wall Street Today | Powell's Caution Cuts Like a Knife

Markets closed down, red across the board, after Federal Reserve President Jerome Powell said he had low confidence the FOMC would lower rates in March.

The Federal Open Market Committee left the Federal Funds target rate unchanged on Wednesday. The FOMC said it would not commit to reducing interest rates before inflation moved closer to the 2% mark. But comments from Federal Reserve President Jerome Powell threw markets off balance when he all but ruled out a March rate cut.

The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward two percent," the Fed released in a statement. "In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in its previously announced plans."

Powell all but ruled out a March cut and said the committee was taking it meeting by meeting and not considering a cut yet.

"We will be looking at this meeting by meeting. Based on the meeting today, I would tell you that I don't think it is likely that the Committee will reach a level of confidence by the time of the March meeting to identify March at as the time to do that, but that is to be seen," Powell said.

Oil futures settled lower on Wednesday, partly pressured by official data showing weekly gains in U.S. crude and gasoline supplies. Prices, however, marked a gain for January following three consecutive months of losses, as traders weighed concerns over the global demand outlook against the threat of an escalation in Middle East tensions.

West Texas Intermediate crude for March delivery CL00 CL.1 CLH24 fell $1.97, or 2.5%, to settle at $75.85 a barrel on the New York Mercantile Exchange. According to Dow Jones Market Data, front-month prices were 5.9% higher for the month, marking the first monthly gain since September.

The Energy Information Administration on Wednesday reported a surprise weekly increase in U.S. commercial crude inventories, which climbed by 1.2 million barrels for the week ended Jan. 26.

On average, analysts surveyed by S&P Global Commodity Insights forecast a weekly decline of 2.3 million barrels. Late Tuesday, the American Petroleum Institute reported an inventory fall of 2.5 million barrels, according to analysts.

The EIA report also revealed a weekly supply rise of 1.2 million barrels for gasoline, while distillate stockpiles fell by 2.5 million barrels. The S&P Global Commodity Insights analyst survey showed forecasts for inventory losses of 450,000 barrels for gasoline and 700,000 barrels for distillates.

New York Community Bancorp shocked markets Wednesday morning, reporting a significant loss, slashing its fourth-quarter dividend, and upping its reserves. The stock plummeted 35% in early trading.