The Nasdaq and the S&P 500 closed lower in choppy trading Wednesday, after the U.S. Federal Reserve cut interest rates by an expected 25 basis points and Fed Chair Jerome Powell cited the weak job market.

The Dow closed higher after meandering during Powell's speech.

The central bank indicated it will steadily cut rates for the rest of the year as policymakers signaled concerns about weakness in the labor market. The Fed projected two more quarter-percentage-point cuts this year.

In a press conference, Powell talked about the rising downside risks of employment compared to inflation, but said inflation risks still need to be assessed and managed.

This rate cut was already priced in by investors, according to data compiled by LSEG.

“Powell tempered some of the initial enthusiasm in the markets for a more aggressive path of monetary easing. He noted the softness in the labor market, but reserves a larger cut for more serious conditions that are not present today," said Michael Rosen, chief investment officer at Angeles Investments.

"The Fed also raised its inflation forecast, highlighting the delicate balance between setting monetary policy to offset a weaker labor market versus bringing inflation lower," he said.

According to preliminary data, the S&P 500 lost 6.63 points, or 0.10%, to end at 6,600.13 points, while the Nasdaq Composite lost 73.10 points, or 0.33%, to 22,260.85. The Dow Jones Industrial Average rose 262.26 points, or 0.56%, to 46,012.75.

The Fed's decision and outlook will test Wall Street's recent rally, which has been supported by rate-cut expectations and revived enthusiasm around AI-stock-linked trading.

Powell fielded several questions about the Fed's independence from the executive branch.

On Tuesday, White House economic adviser Stephen Miran was sworn in as a Fed Governor and an appeals court rejected U.S. President Donald Trump's attempt to sack Governor Lisa Cook.

Meanwhile, Nvidia weighed on the Nasdaq. Shares fell after a report said China's internet regulator had instructed the country's biggest tech companies to stop buying all of the AI leader's chips.

Workday jumped after a report that activist investor Elliott Management took a more than $2 billion stake in the human resources software provider.

Lyft popped on the news that Alphabet's Waymo would launch autonomous cab rides in Nashville next year in collaboration with the ride-hailing firm. Shares in rival Uber fell.