Stocks barely budged on Wednesday after the latest Federal Reserve meeting offered no surprises for investors.
The Dow Jones Industrial Average rose just 12 points. The S&P 500 was essentially unchanged. The Nasdaq Composite rose 0.2% ahead of Big Tech earnings.
The Federal Open Market Committee kept interest rates steady, and Chairman Jerome Powell avoided weighing in on a host of political questions.
Microsoft, Meta Platforms, and Tesla are slated to report results imminently. Wall Street will pay close attention to updates on artificial intelligence spending.
Apple will report results on Thursday.
“It makes sense that the Fed would leave rates unchanged if they were less worried about the labor market – especially with inflation stubbornly persistent above their target – but if anything were to change with hiring trends then they will need to pivot quickly to cutting again,” writes Chris Zaccarelli, chief investment officer for Northlight Asset Management. “We think that rate cuts will be backend loaded (e.g. not until after the first 5 months of the year) and that the stock market will need to rally on earnings growth, given that the tailwind of lower rates has been removed, and with valuations close to historic highs, it’s less likely that multiple expansion can push up prices.”
The S&P 500 crossed 7000 for the first time before pulling back.
“How Magnificent Seven stocks (and other big tech names) respond to earnings over the next two weeks should provide a clearer read on whether the S&P 500 can generate the demand needed to power a more durable push to new all-time highs – to 7,000 and beyond,” Frank Cappelleri, founder of technical analysis firm CappThesis, told Barron’s.