4:17pm: Alphabet and Boeing lead the way
The Dow closed Wednesday up 82 points, 0.2%, at 35,520, while the Nasdaq Composite declined 17 points, 0.1%, to 14,127 and the S&P 500 slid 1 point to 4,567. The small-cap Russell 2000 index gained 12 points, 0.6%, to 1,978.
The benchmarks spiked after the Fed announced a 25-bp interest rate hike this afternoon, but a chunk of those gains evaporated before the closing bell.
The Dow did enough to clinch its thirteenth-straight winning session, the DJIA's longest such streak since 1987. Should it finish ahead again on Thursday, it would be the longest streak since 1897, nearly a full century earlier.
Among the leaders were Alphabet, shares of which rose 5.8% after cloud revenue growth helped the Google-parent beat expectations, and Boeing, which saw its stock climb nearly 9% after rising commercial airline deliveries resulted in a similar expectations beat.
3:11pm: Fed to take things 'meeting by meeting,' Powell says
Shortly after the Fed announced it would hike interest rates by 25 basis points to their highest level since 2001, the Dow was up 118 points, 0.3%, to 33,556, the Nasdaq Composite fell 21 points, 0.2%, to 14,124 and the S&P 500 slid 2 points to 4,566.
The benchmarks each took a decidedly upward swing following the 2:30 pm ET announcement and subsequent press conference from Chairman Jerome Powell.
The rise may be based on optimism that the Fed's current cycle of rate increases has come to a close. Powell said this was possible, but noted there is a "long way to go" to reach the central bank's 2% inflation target.
“I would say it’s certainly possible that we will raise funds again at the September meeting if the data warranted,” Powell said. “And I would also say it’s possible that we would choose to hold steady and we’re going to be making careful assessments, as I said, meeting by meeting.”
12:05pm: Dow's 12-day winning streak in jeopardy
US stocks were mixed in noon trading ahead of an expected 25 basis point interest rate hike from the Federal Reserve this afternoon.
At midday, the Dow gained 40 points to 35,478, while the S&P 500 eased 6 points at 4,562 and the tech-heavy Nasdaq slipped 43 points to 14,102.
“[Investors] should beware of becoming too optimistic that today will mark the end of the rate-hiking cycle, in our view,” UBS’ Solita Marcelli wrote in an investor note on Wednesday.
Notable movers included shares of Alphabet Inc, which climbed 6% after the search giant posted better-than-expected 2Q financial results that were boosted by strong growth in cloud sales.
9:40am: Volatility expected ahead of Fed decision
US stocks moved lower at the open on Wednesday as the Federal Reserve’s anticipated 25 basis point interest rate hike dented investor confidence which had been buoyed in recent days by corporate earnings.
“US stocks could see some volatility as traders become more cautious ahead of the Federal Reserve meeting,” commented Capex.com market analyst George Pavel.
“Strong earnings in the tech sector could help keep the market on a strong footing despite the downward pressures ahead of the Fed.”
Just after the market opened, the Nasdaq had shed 40 points or 0.3% at 14,104 points, the S&P 500 was down 6 points or 0.1% at 4,562 points, and the Dow Jones was 29 points or 0.1% lower at 35,409 points.
Major movers included Boeing, up 4.8% on its smaller-than-expected second quarter loss, and Alphabet, up 5.3% as its earnings topped expectations.
On the other hand, Microsoft had shed 3.5% after reporting decreased Azure cloud revenue growth and Snap was down 19.5% on its weak third quarter guidance.
7:45am: All eyes on the Fed
US stocks are expected to start flat to lower on Wednesday as investors await the latest Federal Reserve interest rate decision, with a 25 basis point hike expected, and assess a batch of earnings from major tech companies released after-hours.
In pre-market trading, futures for the Dow Jones Industrial Average (DJIA) were off 0.1%, with those for the S&P 500 down 0.2%, while Nasdaq 100 futures shed 0.3%.
On Tuesday, the DJIA clinched its 12th-straight winning session, a length not seen for the blue-chip average since February 2017, albeit closing just 26 points, or 0.08% higher at 35,438. The S&P 500 and Nasdaq Composite ended around 0.3% and 0.6% higher, respectively.
Mega-cap tech stocks were among the biggest movers in extended trading following their respective earnings reports. Google-parent Alphabet rose more than 6% as cloud revenue growth helped propel the company to a better-than-expected quarter.
On the other hand, Microsoft slid more than 3% after reporting slowing cloud revenue growth. Outside of Big Tech, Snap tumbled 19% in after-hours action after giving weak guidance for current-quarter performance.
Among the corporate earnings due on Wednesday, Coca-Cola, Stellantis, Boeing and AT&T are among companies expected to report before the bell, while Meta, Chipotle and Mattel’s earnings are slated for after the market close.
Investors mostly though are counting down to the Fed’s latest interest rate policy decision and subsequent press conference with chair Jerome Powell scheduled for 2.15pm ET Wednesday afternoon.
The market is pricing in around a 98% chance the central bank raises interest rates, according to the CME FedWatch Tool, which would mark a return to hikes after not increasing interest rates at its June meeting.
"Last night’s initial reaction to the numbers from Microsoft, and Google owner Alphabet would suggest that optimism might be justified against a backdrop of a still resilient US economy, and a Federal Reserve that looks set to be close to the end of its rate hiking cycle," commented CMC Markets' Michael Hewson.
"Today’s expected 25bps Fed rate hike, after last month’s pause, looks set to be the last rate rise this year, whatever Fed policymakers would have you believe.
"While Powell will try and make the case for further rate hikes, his time would be better spent in making the case for rates remaining higher for longer, and projecting when the FOMC expected the 2% target to be met," Hewson added.
"Core prices remain too high even with headline CPI at 3%, and it is here that the Fed will likely focus its and the market’s attention."