NEW YORK (REUTERS) – Wall Street’s main indexes edged lower on Friday (July 19) after a report that the Federal Reserve plans to cut interest rates by only a quarter-percentage point at the end of July.

The benchmark S&P 500 erased earlier marginal gains after the Wall Street Journal report.

According to the report, while the US central bank is not prepared to make a bigger 50-basis-point cut, it may make further rate cuts in the future given concerns about a decline in global economic growth and uncertainty about trade.

On Thursday, stocks had risen as comments from New York Fed president John Williams increased hopes of a bigger rate cut.

Later that day, however, a New York Fed representative said that Williams’ comments were not intended to telegraph any hints about upcoming Fed policy actions.

Futures market odds of a 50-basis-point cut at the Fed’s July meeting soared to 71 per cent late on Thursday immediately after Williams’ speech but fell to 23 per cent on Friday, according to CME Group’s Fedwatch tool.

“It appears that the Fed has communicated its message,” said Bucky Hellwig, senior vice-president at BB&T Wealth Management in Birmingham, Alabama.

“They’re basically trying to clarify their policy.”

The Dow Jones Industrial Average fell 5.85 points, or 0.02 per cent, to 27,217.12, the S&P 500 lost 11.94 points, or 0.40 per cent, to 2,983.17 and the Nasdaq Composite dropped 43.66 points, or 0.53 per cent, to 8,163.58.

Earlier, US stocks had edged higher as strong results from Microsoft momentarily buoyed technology stocks.

Microsoft shares were last marginally higher, up 0.3 per cent.

Second-quarter profits at S&P 500 companies are now estimated to rise 1 per cent, according to Refinitiv IBES data, in a reversal from earlier expectations of a small drop.

Boeing shares gained 4.2 per cent, despite the planemaker’s disclosure that it would take a US$4.9 billion after-tax hit from the grounding of its 737 Max, indicating that investors had expected more severe repercussions.

Kansas City Southern shares rose 4 per cent after the railroad operator posted a better-than-expected quarterly profit. Its shares helped the Dow Jones Transport index gain 0.8 per cent.

Shares of American Express slipped 2.6 per cent after the credit card issuer warned of higher operating costs this year as it spends heavily on rewards programmes to attract customers.

Declining issues outnumbered advancing ones on the NYSE by a 1.15-to-1 ratio; on Nasdaq, a 1.31-to-1 ratio favoured decliners.

The S&P 500 posted 45 new 52-week highs and five new lows; the Nasdaq Composite recorded 72 new highs and 76 new lows.