The CNN Money Fear and Greed index showed further improvement in the overall market sentiment, with the index in the “Greed” zone on Wednesday.

U.S. stocks settled lower on Wednesday, following the Federal Reserve’s interest rate decision. The U.S. central bank slashed interest rates by 50 basis points Wednesday at its September Federal Open Market Committee meeting, lowering the federal funds rate to a range of 4.75% to 5%. This marks the first rate cut in over four years and breaks a streak of 12 consecutive months with rates held steady.

On the economic data front, housing starts in the U.S. climbed by 9.6% from the prior month to an annualized rate of 1.356 million units for August. U.S. building permits gained by 4.9% to an adjusted annual rate of 1.475 million in August.

General Mills, Inc. ( GIS ) reported better-than-expected earnings for its first quarter on Wednesday.

Most sectors on the S&P 500 closed on a negative note, with consumer staples, utilities, and information technology stocks recording the biggest losses on Wednesday. However, energy and communication services stocks bucked the overall market trend, closing the session higher.

The Dow Jones closed lower by around 104 points to 41,503.10 on Wednesday. The S&P 500 fell 0.29% to 5,618.26, while the Nasdaq Composite fell 0.31% at 17,573.30 during Wednesday's session.

Investors are awaiting earnings results from Darden Restaurants, Inc. ( DRI ) , FactSet Research Systems Inc ( FDS ). , and FedEx Corporation ( FDX ) today.

What is CNN Business Fear & Greed Index?

At a current reading of 56.2, the index was in the “Greed” zone on Wednesday, versus a prior reading of 55.9.

The Fear & Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.

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