4:15pm: Stocks close in the red
Wall Street took a sharp turn lower on Wednesday as investors digested a more hawkish-than-expected Federal Reserve decision, with rising bond yields putting pressure on equities.
The Dow Jones Industrial Average tumbled 1,153 points, or 2.2%, to 51,594, while the S&P 500 dropped 113 points, or 1.5%, to 7,316. The Nasdaq also fell heavily, losing 434 points, or 1.7%, to close at 24,443.
The selloff came after the Fed kept interest rates unchanged, as expected, but the decision included three dissenting officials who argued for a rate hike. The split decision raised concerns that policymakers may remain focused on fighting inflation rather than moving toward rate cuts.
Bond markets reacted quickly, with longer-term Treasury yields moving higher. While the two-year yield slipped four basis points, the 10-year yield climbed five basis points and the 30-year yield jumped 11 basis points. The move pushed the 30-year Treasury yield above 5.2%, its highest level since 2007.
Higher yields weighed on growth stocks and broader market sentiment, as investors reassessed the outlook for borrowing costs and economic growth.
Attention now turns to a busy slate of earnings after the closing bell, with major names including Meta, Microsoft, Qualcomm, and Starbucks set to report results. Investors will be looking for signs of how companies are navigating elevated rates, ongoing AI investment, and shifting consumer demand.
3:50pm: Proactive news headlines
- Ocean Power Technologies Inc (NYSE-A:OPTT) achieved CMMC Level 2 cybersecurity compliance, enabling the company to pursue US defense contracts and federal programs requiring protection of Controlled Unclassified Information.
- Ecora Royalties PLC (LSE:ECOR, TSX:ECOR, OTCQX:ECRAF) reported a 61% year-over-year increase in quarterly portfolio contribution to US$19 million, driven by record cobalt receipts from the Voisey’s Bay operation and strong base metals performance.
- VivoPower PLC (NASDAQ:VIVO, FRA:51J) secured a $50 million PIPE investment from institutional investors led by Blue Sky Capital to support its growth strategy, including opportunities in AI data centers and infrastructure.
- 1911 Gold Corp (TSX-V:AUMB, OTCQB:AUMBF, FRA:2KY) closed a bought deal financing that raised gross proceeds of C$35.65 million to support its exploration and development activities.
- Ilika PLC (AIM:IKA, OTCQX:ILIKF) said it has moved into a revenue-generating phase, with initial royalties from its miniature solid-state batteries expected in fiscal 2027 as production ramps up with manufacturing partner Cirtec Medical.
2:45pm: Market movers
- Boston Scientific Corp (NYSE:BSX, XETRA:BSX) reported second-quarter results that beat analyst expectations for revenue and adjusted earnings, with adjusted EPS of $0.86 on revenue of $5.442 billion, while raising its full-year sales outlook.
- Ocean Power Technologies Inc (NYSE-A:OPTT) achieved CMMC Level 2 cybersecurity certification, allowing the company to pursue US Department of War contracts and other federal programs requiring protection of sensitive information.
- SoFi Technologies reported second-quarter 2026 results above Wall Street expectations, with adjusted EPS of $0.12, stronger revenue growth, and an increased full-year revenue outlook as it expanded its member base and product offerings.
- Procter & Gamble Co (NYSE:PG, XETRA:PRG) reported fourth-quarter revenue of $21.2 billion that missed analyst estimates despite beating profit expectations, with shares falling more than 3% as organic sales remained flat year-over-year.
- Ford Motor Company (NYSE:F) beat second-quarter profit expectations with adjusted EPS of $0.42 and raised its full-year earnings guidance, sending shares more than 5% higher in premarket trading.
2:10pm: Fed keeps rates steady
The Federal Reserve kept interest rates unchanged, as widely expected, but the decision came with an unusually divided vote as three policymakers pushed for a rate increase.
Cleveland Fed President Beth Hammack, Minneapolis Fed President Neel Kashkari, and Dallas Fed President Lorie Logan dissented in favor of a 25-basis-point rate hike, signaling growing disagreement within the central bank over the inflation outlook and policy path.
Fed futures markets also scaled back expectations for a September rate hike, with swaps no longer fully pricing in an increase at the meeting.
Earlier in the day, White House economic adviser Kevin Hassett said, “We expect Warsh to do the right thing,” referring to Fed Governor Kevin Warsh.
Stocks initially moved modestly higher following the announcement, but the gains were not enough to pull major indexes out of negative territory as investors weighed the Fed’s outlook and the split among policymakers.
1:35pm: Chip selloff overblown, UBS says
Semiconductors are caught in a selloff UBS thinks is overblown.
The bank argues that fears over "circular financing" in AI infrastructure deals misread who's actually cashing in on the buildout, and it's the chip supply chain, not the hyperscalers, footing the bill.
UBS identified four drivers behind the recent correction: concerns about open source models weighing on frontier model providers' growth, questions about the memory cycle's sustainability, perceived "circular" financing arrangements, and crowded investor positioning in semis.
The bank pushed back on the first three.
12:45pm: Meta due up
Meta Platforms Inc (NASDAQ:META, XETRA:FB2A, SIX:FB) (Meta Platforms Inc (NASDAQ:META, XETRA:FB2A, SIX:FB), Meta Platforms Inc (NASDAQ:META, XETRA:FB2A, SIX:FB), Meta Platforms Inc (NASDAQ:META, XETRA:FB2A, SIX:FB)) is expected to post second-quarter results above Wall Street expectations, with analysts pointing to healthy advertising demand and early returns from artificial intelligence investment even as investors press the company for clearer evidence its AI spending will pay off.
Bank of America expects Meta to report revenue of $60.6 billion and earnings per share of $7.50, above consensus of $60.2 billion and $7.18, citing healthy ad growth and potential upside from May's workforce reductions.
Investors are expected to focus on AI initiatives during the call, including advertising improvements tied to AI model integration, Muse Spark, and potential external compute sales.
For the third quarter, the bank expects Meta to guide revenue to $60.5 billion to $63.5 billion, roughly 18% to 24% growth year over year.
12:00pm: Microsoft capex in focus
Microsoft Corp (NASDAQ:MSFT) (Microsoft Corp (NASDAQ:MSFT)) reports fiscal fourth-quarter results tonight, with analysts largely centering their attention on capital expenditures as the company continues its aggressive buildout of AI infrastructure.
Bank of America analysts said "AI execution remains the central debate" heading into the print, with Azure growth, AI infrastructure spending, and Microsoft 365 Copilot adoption expected to dominate the conversation.
The bank estimates Q4 capital expenditures, including finance leases, will total about $42 billion, up 32% from the prior quarter and 74% from a year earlier.
Analysts said the higher spending is likely to pressure free cash flow in the near term, and that Azure growth at or above management's guided 39% to 40% range is likely needed to support the stock. A weaker result, they added, could raise concerns about returns on AI investments.
11:05am: Fed expected to hold
The Federal Reserve is widely expected to leave interest rates unchanged today, with markets pricing in only a small chance of a quarter-point hike.
Swissquote analyst Ipek Ozkardeskaya said that Fed Chair Kevin Warsh's decision to drop forward guidance means future rate moves remain uncertain, but they do not expect the central bank to rush into raising rates at this meeting.
"The latest inflation figures were soft enough to justify waiting until the September meeting," Ozkardeskaya commented.
"Yet the accompanying statement will likely remain cloudy — as cloudy as the situation in the Middle East — with a hawkish tilt, as Warsh is unhappy with inflation running above target for the past half-decade regardless of the recent surge in energy prices. So, we know that another Fed rate hike is coming; we just don't know when.
10am: Dow drops over 600 points at open
Selling is dominating early stock trading on Wall Street, with the Dow Jones falling 611 points, or 1.16%, to 52,136.
The S&P 500 dropped 0.4% to 7,400, while the Nasdaq fell 0.5% to 24,763 as renewed US-Iran tensions weighed on risk appetite.
Paint maker Sherwin-Williams led the early Dow fallers, down 3.8% despite an earnings beat and guidance hike, followed by Procter & Gamble after its earnings miss.
Caterpillar, Goldman Sachs, Boeing, JPMorgan, Honeywell, Home Depot and IBM also declined, while technology heavyweights Microsoft and Amazon added further pressure to the index. Visa was roughly flat as investors digested earnings.
Technology stocks remain under pressure on the Nasdaq 100. SanDisk fell 3.8%, while Applied Materials, NXP Semiconductor, KLA, Arm Holdings and Advanced Micro Devices were among the semiconductor names in negative territory, betrween 3% and 1%.
Seagate Technology rose 1.6% after publishing earnings.
9.15am: Trump swears Iran will 'get a beating'
Oil prices were nudged higher after Donald Trump threatened a forceful response to Iran's overnight attacks on US assets, telling Fox News that Washington would "beat the f**king shit" out of Tehran.
"We'll be hitting them hard. They're going to get a beating," the US president said, describing the missile strike against American forces in Jordan as a "surprise attack" that gave troops only minutes to respond.
Trump said US-Saudi strikes against Iran-backed militias in Iraq were coordinated with Baghdad and called the groups a "cancer on the world".
Despite the escalation, Trump said US negotiators would be allowed to continue talks with Iran. He added that his meeting with Israeli Prime Minister Benjamin Netanyahu had gone well and that Netanyahu "understands now", without explaining further.
US market liveblog: stocks set for mixed open ahead of Fed decision
US stocks are set for a mixed open on Wednesday as investors look ahead to the Federal Reserve's latest interest-rate decision, while renewed tensions in the Middle East and continued pressure on semiconductor stocks cloud the mood.
Ahead of the opening bell, Dow Jones futures were down 186 points, or 0.35%, while S&P 500 futures were 0.16% higher and Nasdaq 100 futures were up 0.14%.
The cautious start follows a divided session on Wall Street. The S&P 500 gained 0.2% to 7,429, while its equal-weighted counterpart climbed 1.1% to a record high as a sharp fall in oil prices supported the broader market. The Dow Jones also climbed 537 points or 1% to close at 52,747.
However, the Nasdaq slipped 0.2% to 24,877 as chip stocks remained under pressure, with the Philadelphia Semiconductor Index tumbling 4.5%.
Oil prices rebounded overnight after the US said it intercepted an Iranian attack against American bases in the Middle East, ending a pause in the fighting.
Iranian state media said the missiles were launched in response to "aggressive US actions", while the Revolutionary Guards said they targeted three tankers in the Strait of Hormuz.
WTI crude rose 4.7% to around $83 a barrel, having fallen below $79 on Tuesday afternoon. The global Brent benchmark had dropped 16.5% over the previous three sessions – its steepest three-day decline since April 2020.
The chip selloff intensified in Asia. South Korea's Kospi plunged 8.7% after an 11% fall the day before, with SK Hynix tumbling 16.5% after a sixfold jump in quarterly profit was short of expectations. Samsung dropped 11% ahead of its results.
European markets have been mixed, with the FTSE 100 and DAX higher but the CAC 40 and IBEX in negative territory.
The FOMC decision and accompanying commentary will dominate later trading as investors assess the outlook for rates against volatile energy prices and signs of strain in highly valued technology stocks.
The CME’s FedWatch tool indicates that there is a 30% chance of a rate hike at the meeting.
"The question is, will new chair Kevin Warsh spring a ‘surprise’ hike on financial markets," said analyst Kathleen Brooks at XTB.
"The Fed Fund Futures market thinks that there is a decent chance that the Fed will embark on a preemptive rate hike to address potential inflation risks ahead of time. But is the market right to think this?"
A rate hike "would not be grounded in the current labour market or inflation readings," she said, with such a potential decision "rooted in risk management".