"As the (Federal Open Market) Committee (FOMC) contemplates the future path of the target range for the federal funds rate, it will continue to monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion," the FOMC said in a statement.
During an ensuing press conference, Powell said the central bank's cut was a "mid-cycle adjustment to policy," adding that the rate cut is "not the beginning of a long series of rate cuts."
The remarks sent chills down through the market's spine, evaporating all the gains of the three major indexes of the day and sinking the Dow by a tumble of over 470 points once in the afternoon sessions, which marked its worst day since May.
Powell's remarks has sent "a muddled and confusing message on the outlook for the fed funds target rate and one that disappointed market participants hoping for a more clearly dovish signal," according to a Bank of America Merrill Lynch Global Research report on Wednesday.
Meanwhile, Wall Street digested a batch of key economic data this week, some of which came below market expectations and pointed to slowing U.S. economic activity.
On the economic front, U.S. consumer sentiment index registered 98.4 in July, higher than the 98.2 in June, the University of Michigan said on Friday.
However, the reading came below market estimate of 98.5, according to economists polled by financial data provider Refinitiv.
Total nonfarm payroll employment rose by 164,000 in July, and the unemployment rate was unchanged at 3.7 percent, the U.S. Bureau of Labor Statistics reported on Friday.
The job growth came shy of the forecast of 165,000 by economists surveyed by The Wall Street Journal.
July's reading was in line with the average employment growth in the first six months of the year. Yet it was lower than the average monthly pace of 223,000 in 2018.
The Institute for Supply Management (ISM) manufacturing index fell to 51.2 in July from June's 51.7, the lowest reading since August 2016, ISM said on Thursday.
The reading indicated that the U.S. manufacturing sector expanded at its slowest pace over the past three years.
Initial jobless claims, or the number of Americans filing applications for unemployment benefits, rose moderately to 215,000 in the week ending July 27, said the Labor Department on Thursday.
The reading marked an increase of 8,000 from the previous week's level, which was revised up by 1,000 to 207,000.
U.S. private-sector employment increased by 156,000 in July from the previous month, according to the ADP National Employment Report on Wednesday, which topped market estimates of 150,000.
The services sector and goods producers contributed the most to July's growth, which came higher than June's revised increase of 112,000.
