U.S. stocks opened mixed on Wednesday as investors absorb results from Microsoft and Alphabet, and the focus turns to the Federal Reserve policy decision later in the day.
How are stocks trading
-
The Dow Jones Industrial Average
DJIA,
-0.04%
gained 15 points, or less than 0.1% to around 35,443 -
The S&P 500
SPX,
-0.19%
dipped 8 points, or 0.2% to about 4,559 -
The Nasdaq Composite
COMP,
-0.17%
dropped 63 points, or 0.4% to about 14,081
On Tuesday, the Dow Jones Industrial Average rose 27 points, or 0.08%, to 35438, the S&P 500 increased 13 points, or 0.28%, to 4567, and the Nasdaq Composite gained 86 points, or 0.61%, to 14145.
What’s driving markets
Stocks were struggling for direction Wednesday as traders eschewed bold bets ahead of the Federal Reserve’s monetary policy decision due at 2 p.m. Eastern.
The central bank is widely expected to raise its policy interest rate by another 25 basis points to a range of 5.25% to 5.50%, but markets are unsure whether that will mark the end of this current monetary tightening cycle.
Consequently, it is the Fed’s accompanying statement and comments from Chair Jerome Powell at his press conference, starting at 2:30 p.m., that will carry the greater heft, as investors seek guidance on the future trajectory for borrowing costs.
“A +25bp hike is largely expected but that is not what will move markets. It is the qualitative views around the Fed’s sense of progress on the inflation war that matters,” wrote Tom Lee, head of research at Fundstrat, in a note to clients.
Lee added that given the Fed’s likely comments and how the market is set up, he thought the probabilities favor an S&P 500 index rally post-FOMC of greater than 1%.
Meanwhile, also contributing to the market’s relative stasis on Wednesday were counteracting reactions on the earnings front.
Shares in tech behemoths Microsoft
MSFT,
and Alphabet
GOOG,
went in opposite directions following their results and guidance late on Tuesday, leaving the Nasdaq Composite in line for a somewhat soft start to the new session.
Traders are in the middle of a week in which about 170 companies from the S&P 500, representing roughly 40% of the benchmark’s market capitalization, will report their earnings.
The results of AT&T
T,
Boeing
BA,
Coca-Cola
KO,
and General Dynamics
GD,
were also published early Wednesday, while Meta Platforms
META,
Lam Research
LRCX,
and eBay
EBAY,
will feature after the close.
U.S. economic updates set for release on Wednesday include new home sales for June, due at 10 a.m. Eastern.
Companies in focus
-
Alphabet Inc.
GOOG,
+6.37% GOOGL,
+6.62%
stock rose over 5% Wednesday after the Google parent topped Wall Street profit and sales estimates on strong advertising sales. -
Microsoft Corp.‘s
MSFT,
-3.80%
was down 3.5% after management said the process of generating revenue from AI use cases would be gradual. -
Snap Inc.
SNAP,
-18.82%
tanked 19% after the social-media company forecast worse-than-expected sales for its current quarter. -
Boeing Co.
BA,
+5.66%
jumped 4.4% toward an 18-month high after the aerospace and defense giant reported big second-quarter revenue and free cash flow beats, amid strength in its commercial airplanes business. -
Texas Instruments Inc.
TXN,
-5.29%
dropped almost 5% after the chip maker’s forecast came in lower than expected as it continues building out capacity amid rising inventory. -
Wells Fargo & Co.
WFC,
+2.00%
rose 2.8% after the bank said its board approved a new share buyback program of up to $30 billion and a dividend increase. -
PacWest Bancorp
PACW,
+25.87%
rocketed almost 29% as the Banc of California
BANC,
-0.30%
confirmed plans to buy the troubled regional lender.
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