Two catalysts land on the same afternoon
U.S. stock futures pointed in different directions early Wednesday, with traders holding back ahead of two scheduled events: quarterly results from the largest technology companies and the Federal Reserve's latest interest-rate decision, both due later in the day. S&P 500 futures edged up, Nasdaq-100 futures gained 0.5%, and Dow futures slipped 0.2%.[S1][S2][S3]
The central bank concludes a two-day policy meeting Wednesday, and the overwhelming expectation is that it will leave its target range at 3.75% to 4%. At the September meeting, policymakers lifted rates by a quarter of a percentage point. CME's FedWatch tool puts the probability of no change at about 92%, and the announcement is scheduled for 2:00 p.m. ET.[S1]
Chip stocks rally on a $63 billion financing deal
Tuesday's regular session ended higher on Wall Street, helped by another strong day for semiconductor shares. Broadcom announced that a group of banks would supply $63 billion in financing so that its chips and networking equipment could be purchased and leased to Anthropic, the company behind Claude. Broadcom stock added 4%, Advanced Micro Devices rose 5.5%, and Micron Technology gained 2.8%.[S1]
Those gains helped lift the Nasdaq Composite by 1.2% for the session. Equities also drew support from a decline in oil prices after reports that Iran's Supreme Leader Mojtaba Khamenei held talks with the country's top security official, Mohsen Rezaei, about the terms for ending the war with the United States.[S1]
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Tech's recovery and the questions still hanging over AI
After Wednesday's closing bell, attention shifts to the artificial-intelligence trade as Alphabet and Microsoft, two members of the so-called Magnificent Seven, open the Big Tech earnings season. Shares of technology companies exposed to AI infrastructure have come under pressure in recent weeks as investors questioned how the buildout is being financed.[S1]
Mike Wilson, chief U.S. equity strategist at Morgan Stanley, suggested the worst of the pullback may already be past. Speaking on CNBC's Closing Bell on Tuesday, he described the market as having spent four or five months in correction mode and argued that it had absorbed the pressure efficiently.[S1]
