S&P 500 briefly tops 7,000 before pullback as Fed, big tech earnings loom

NEW YORK: The S&P 500 briefly topped 7,000 points for the first time on Wednesday only to pull back, with volatility picking up as traders awaited the Federal Reserve’s rate decision and a wave of Big Tech earnings.

The benchmark slipped back to little changed, while the Nasdaq held on to a mild advance after trimming earlier gains.

“These big round numbers can be difficult psychological tests for the market, but we think it’s a very positive sign,” said Jeff Buchbinder, chief equity strategist for LPL Financial. The Fed convenes later in the day for its rate decision, with policymakers widely expected to keep it unchanged at 3.5 percent–3.75 percent. Traders will be alert for the Fed’s statement and Chair Jerome Powell’s remarks, for clues on the future rate trajectory.

The US central bank, which recently started receiving real-time data on the economy’s health after a partial government shutdown last year, is navigating policy while peering through an increasingly politicized fog. This meeting arrives in the backdrop of a Justice Department inquiry launched earlier this month involving Powell as well as Trump’s hints that a successor will be named “soon”.

The markets currently expect the first rate cut to come in June, according to CME’s FedWatch tool.

At 11:31 a.m. ET, the Dow Jones Industrial Average rose 49.62 points, or 0.10 percent, to 49,053.03, the S&P 500 gained 1.23 points, or 0.03 percent, to 6,980.50 and the Nasdaq Composite gained 20.74 points, or 0.09 percent, to 23,839.44. Nvidia climbed 1.5 percent, Intel jumped 11.3 percent, and Micron and Microchip Technology each gained over 5 percent. SK Hynix, a key Nvidia supplier, reported a record quarterly profit and ASML booked its highest ever fourth-quarter orders, igniting a tech rally from Europe to Asia.

Among earnings-driven moves, Texas Instruments surged 8 percent after the analog chipmaker forecast first-quarter revenue and profit above Wall Street estimates. Starbucks rose 1.8 percent after posting a bigger-than-expected increase in first-quarter comparable sales.