Wall Street slips ahead of Big Tech earnings, Fed meeting

Wall Street’s main indexes fell on Wednesday as investors treaded carefully ahead of several Big Tech earnings reports and a Federal Reserve meeting expected to be the last for Jerome Powell as its Chair.

Amazon, Meta Platforms, Microsoft and Google-parent Alphabet are set to report after the closing bell, when investors will gauge how their AI bets are paying off.

The results could shape investor confidence in one of the most resilient pockets of the financial markets, after sentiment was slightly dampened following a Wall Street Journal report that said OpenAI had missed its internal targets for weekly users and revenue, reviving fears about the AI spending spree of tech heavyweights.

“Tech has had an impressive rebound so far this quarter. The question now is whether mega-cap tech can help push this rally to new heights,” said Bret Kenwell, U.S. investment analyst at eToro.

“Semiconductors have done much of the heavy lifting. There’s clearly powerful momentum behind the group, but even the strongest rallies need time to reset.”

The Philadelphia SE Semiconductor Index rose 1.5%, and has gained 43.6% so far this year.

Amazon added 0.4%, while Microsoft and Meta slipped 1% and 0.7% respectively. Alphabet was down 0.2%.

The S&P 500 healthcare sector declined the most on the benchmark, falling 0.8%. GE Healthcare and Humana dropped 12.7% and 4.6%, respectively.

At 09:50 a.m. ET, the Dow Jones Industrial Average fell 274.77 points, or 0.56%, to 48,867.16, the S&P 500 lost 13 points, or 0.18%, to 7,125.80 and the Nasdaq Composite lost 40.82 points, or 0.17%, to 24,622.04.

Ten of the main S&P 500 sectors were in the red.

Powell’s curtain call?

Investors will also tune in to Fed Chair Jerome Powell’s final press conference as the head of the U.S. central bank.

Republican Senator Thom Tillis dropped his objection to the Senate confirmation of Kevin Warsh, whom President Donald Trump had nominated to succeed Powell, after the Department of Justice ended an investigation into Powell that Tillis felt was a threat to the Fed’s independence.

Traders expect the central bank to leave rates unchanged, but will closely parse Powell’s remarks.

The Fed has said it was monitoring risks tied to the conflict, and with tensions in the Middle East showing few signs of easing, some investors worry policymakers may have to factor them more heavily into their outlook.

“While Powell’s signals may be taken with some caution, given that this should be his last press conference, the risks are that he errs on the hawkish side,” wrote ING Economics’ FX strategist Francesco Pesole.

Iran’s latest proposal for ending the two-month war would set aside discussion of its nuclear program until the conflict was concluded and shipping disputes resolved. Trump, however, said he was unhappy with the offer.

The Wall Street Journal reported that Trump had instructed aides to prepare for an extended blockade of Iran’s ports.

Meanwhile, U.S. single-family homebuilding increased to a 13-month high in March, exceeding expectations of economists polled by Reuters, data showed on Wednesday. Permits for future construction, however, fell sharply.

Among individual stocks, online brokerage Robinhood Markets fell 11% after missing expectations for first-quarter profit.

Shares of data-storage companies climbed following an upbeat fourth-quarter forecast from Seagate Technology. Seagate jumped 15.9%, while peers Micron Technology, Sandisk and Western Digital gained 3.6%, 8.2%, and 9.1%, respectively.

Coffee giant Starbucks rose 6% after raising its annual profit forecast.

Payments-processing firms Visa and Mastercard added 9.2% and 3.6%, respectively, after Visa raised its forecast for full-year earnings.

NXP Semiconductors jumped 25% after it said it expects second-quarter revenue and profit above Wall Street expectations.

Declining issues outnumbered advancers by a 2.14-to-1 ratio on the NYSE and by a 2.29-to-1 ratio on the Nasdaq.

The S&P 500 posted 10 new 52-week highs and 17 new lows while the Nasdaq Composite recorded 39 new highs and 58 new lows.