4:10pm: Fed comments weigh on sentiment
US stocks finished the day lower as hopes the Federal Reserve would soon be cutting interest rates were dashed.
The Nasdaq saw the biggest losses, down 2.2% at 14,154 points.
The S&P 500 shed 1.6% at 4,845 points while the Dow Jones closed down 0.8% at 38,150 points.
"Stock markets have been addicted to the prospect of rate cuts and this has driven stock markets higher so far this year but the reality is that the Fed is not yet ready to cut rates and this could tone down the bullish sentiment in the market as we move into February," XTB research director Kathleen Brooks commented.
2:20pm: Cautious Powell will hold rates until June
The Federal Open Market Committee's decision to maintain interest rates at 5.25%-5.5% was expected, with the focus now shifting to the March meeting where market opinions diverge on a potential 25 basis points rate reduction.
Markets, led by the Nasdaq, fell further following the Fed's comments
While nearly 43% expect rates to remain stable, the majority anticipates a rate cut, despite the FOMC stating it won't be appropriate until inflation confidently moves toward 2%, according to Truflation's Oliver Rust.
"This appears at odds with today’s FOMC statement, with the committee saying it “does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2%," Rust said.
"The decision of when to start cutting rates is arguably a more important and delicate one than interest rate increases, so the next two months of economic data will be crucial to watch."
12:00pm: Stocks ease ahead of Fed, fresh bank nerves
Stocks eased ahead of the interest rate decision, after poorly received tech earnings, and as the shares of a New York bank tumbled after it reported a surprise loss, raising concerns about the health of regional lenders.
At noon, the Dow Jones Industrial Average was down 0.1% at 38,438.42, the S&P 500 was down 0.9% at 4,881.52 and the Nasdaq Composite was down 1.4% at 15,294.73.
New York Community Bancorp, the regional lender that purchased deposits from Signature Bank last year, fell a record 45% after reporting a fourth-quarter loss and dividend cut.
The KBW Regional Banking Index tumbled as much as 4.8%, the most in a day since May.
“Right now, it appears this is an isolated event,” said Tom di Galoma, co-head of global rates trading for BTIG in New York, quoted by Bloomberg.
“The bond market is looking for an event that will trigger the Fed to ease policy.”
The US central bank is widely expected to leave interest rates unchanged with attention focusing on commentary on the timing of future rate cuts.
9:43am: Nasdaq hit by Alphabet fall, Boeing up on earnings beat, pulls guidance
The Nasdaq has fallen sharply weighed by falls in Alphabet and AMD, although Microsoft has climbed after well received results.
Shortly after the opening bell, the Dow Jones Industrial Average was up 0.3% at 38,581.41, the S&P 500 was down 0.5% at 4,900.61 and the Nasdaq Composite was down 1.1% at 15,333.83.
Alphabet was down 4.8% after revenue at its core Google arm fell short, while AMD's weak outlook saw shares decline 4.2%.
On Wednesday, Boeing rose 2.8% after better-than-expected earnings although it declined to offer gudance as its chief executive believes "now is not the time" to set out forecasts.
Boeing is dealing with another wave of safety issues, in the wake of a mid-air incident on an Alaska Air Group (NYSE:ALK) flight earlier in January, which saw the blowout of a door plug on a 737 MAX 9 jet.
Calhoun said that Boeing would usually lay out forecasts for the year ahead at this point. However, "now is not the time for that".
Elsewhere, Mastercard jumped 2.9% after reporting a jump in quarterly and yearly revenue and income.
The financial services company reported that revenue in the fourth quarter rose 13% to $6.55 billion from $5.82 billion a year earlier.
The increase was attributable to growth in our payment network and our value-added services and solutions, MasterCard said.
In economic news, the US private sector added fewer jobs than expected at the start of the year, numbers from payroll processor ADP showed.
Private sector employment increased by 107,000 jobs in January, easing from a downwardly revised 158,000 increase in December, and falling short of the consensus of 145,000.
7:00am: Nasdaq to slide after Big Tech fails to match the hype
The Nasdaq is expected to open sharply lower after several tech giants failed to live up to much-hyped expectations when reporting earnings.
In pre-market trading, futures for the Dow Jones Industrial Average were up 0.1%, while those for the S&P 500 were down 0.5% and contracts for the Nasdaq 100 futures declined 1.2%.
Alphabet fell 5.6% after revenue at its core Google business disappointed despite an overall earnings beat, while AMD slid 6.0% on a weak outlook.
Microsoft held up better with shares down 0.7% after sold looking earnings while Tesla is down 3.0% after Elon Musk’s $55 billion pay package from Tesla was voided by a Delaware judge
Later in the session, the US Federal Reserve’s monetary policy committee will conclude its two-day meeting and release a statement on monetary policy.
Economists widely expect the central bank to hold interest rates steady at a target range of 5.25 to 5.5%.
Elsewhere, ADP payrolls data, plus earnings from Boeing, Mastercard and Qualcomm will hit the wires.