Markets Hold Firm Before the Fed Speaks
U.S. stocks traded slightly higher Wednesday morning as investors waited for the Federal Reserve's afternoon announcement on interest rates. The S&P 500 added 0.1%, leaving it 1.1% below the all-time high reached earlier in the month. The Dow Jones Industrial Average climbed 144 points, or 0.3%, by 10:15 a.m. Eastern time, while the Nasdaq composite dipped just under 0.1%.[S1][S2][S3][S4][S5][S6][S7]
Attention centered on what the central bank might say about the future path of rates. Last month the Fed lifted its main rate for the first time in three years, aiming to curb inflation that has been pressuring households and the economy. Wall Street broadly expects no change at this meeting, but traders are looking for any signal about later gatherings. Fed Chairman Kevin Warsh has insisted since taking the post that the institution should offer fewer hints about upcoming moves.[S1]
Earnings Winners and Laggards
Interest rates matter to equities because they are among the primary forces that determine stock valuations. Corporate profits are the other major driver, and several companies drew buyers Wednesday after surpassing analyst expectations for the summer quarter. GE HealthCare Technologies jumped 7.8% on better-than-expected profit and revenue, and it also lifted its full-year outlook for revenue growth and other financial measures.[S1]
Etsy rose 4.9% after its quarterly profit easily beat forecasts. CEO Kruti Patel Goyal said the online marketplace recorded growth in active buyers compared with a year earlier for the first time in two years, and its active seller base expanded at its fastest pace in two years. On the losing side, Boston Scientific dropped 8.1% despite a milder profit decline than analysts anticipated, because its guidance for the current quarter fell short. Robinhood Markets sank 3% after posting weaker profit and revenue than expected.[S1]
Chip Stocks and Global Markets
Artificial-intelligence shares held relatively firm, steadying this week after sharp swings tied to worries that elevated borrowing costs could undermine the AI data-center buildout, much of it financed with debt. The sector received a lift when South Korea's SK Hynix surged 10.9% in Seoul after its latest profit report. The memory-chip maker said it is experiencing a virtuous cycle of growing AI usage and expects demand to exceed supply through 2030. Micron Technology gained 4.4% and was the strongest contributor to the S&P 500's advance.[S1]
Treasury yields were little changed before the Fed's statement, with the 10-year yield at 5.01% versus 4.99% late Tuesday. It sits near the upper end of its range since climbing from 3.97% when the war with Iran pushed oil prices and inflation concerns higher, though it has retreated after exceeding 5.30% earlier this month, its highest since 2002. Brent crude rose 1.8% to $111.33 a barrel amid continuing uncertainty over the Middle East and global energy. Abroad, South Korea's Kospi led with a 6.6% jump, Japan's Nikkei 225 added 1.1% and France's CAC 40 gained 0.1%.[S1]
