Stocks traded this Wednesday morning with mixed results as investors anxiously awaited the Federal Reserve's crucial policy decision. While the Dow Jones Industrial Average (DJIA) managed a small gain, the broader S&P 500 and tech-heavy Nasdaq Composite slipped slightly.
This comes after a rough April, the worst month of 2024 for trading, hit by concerns surrounding inflation and rising labor costs. Disappointing earnings reports from chipmakers like AMD and Super Micro further lowered investor sentiment. AMD shares plunged nearly 10% after hours, dragging down other chipmakers like Nvidia. This tempered initial hopes for an AI-driven surge in the sector.
Fed Reserve in the Spotlight
The focus has now shifted to the Federal Reserve's policy announcement later today. The Fed is widely expected to maintain the current interest rate, a 23-year high. However, all eyes are on Fed Chair Jerome Powell's comments regarding the future trajectory of interest rates. With inflation staying stubborn, many expect Powell to maintain a cautious stance, emphasizing the need for continued observation of price pressures before any potential easing.
The earnings season also delivered some jolts. CVS shares plummeted after the healthcare giant lowered its 2024 profit forecast, while Starbucks stock tumbled following a disappointing earnings report.
Economic data released today offered mixed signals. The Job Openings and Labor Turnover Survey (JOLTS) indicated a modest decline in job openings for March, while the latest ISM Manufacturing data showed a contraction in activity after a brief period of expansion.
Looking Ahead
Overall, the market remains in a wait-and-see mode, with investors cautious ahead of the Fed's decision and digesting ongoing earnings reports. While the Dow managed a small gain, the broader market seems to be taking a breather before reacting to the Fed's policy direction and further earnings developments.
