The S&P 500 dropped 1.6% after a report showed U.S. employers cut more jobs last month than they created.
Wednesday's decision brings the Fed's key rate down to about 3.9%, from about 4.1%.
The S&P 500 closed at 4,410, up 0.3%, while the Dow and Nasdaq rose 0.3% and 0.6%.
China’s government says Washington must commit to rolling back punitive tariffs on Chinese goods if the two sides reach a trade deal.
Uber capped off a rocky first day of trading on Wall Street with its shares closing at $41.57, down almost 8% from their starting price of $45.
U.S. and Chinese negotiators start two days of high-level talks Wednesday aimed at settling a six-month trade war that has weakened both sides.
President Donald Trump says he has confidence in Treasury Secretary Steven Mnuchin, calling him a "very talented guy" and a "very smart person."
More Americans applied for unemployment benefits last week, but their numbers remained low enough to suggest that layoffs are rare and the job market is healthy.