Google lifts Nasdaq as focus turns to Fed

The technology-heavy Nasdaq rose on Wednesday on strong earnings from Google-parent Alphabet, as investors turned to the Federal Reserve to gauge the impact of rising inflation and the Delta variant on its monetary stimulus.

Alphabet Inc shares rose 3.8% to an all-time high as a surge in advertising spending helped it post record quarterly results, although the Nasdaq's gains were capped by a forecast of slowing revenue growth from Apple Inc.

Wall Street's main indexes have scaled record highs this month on hopes of stellar corporate results amid a broader economic recovery, but the pace of gains has slowed recently due to a deepening regulatory crackdown in China and fears of a quicker-than-expected tapering of monetary policy.

US stocks end volatile week at records, European shares also rise

All eyes on Wednesday will be on the outcome of the Federal Reserve's two-day meeting, with investors looking for comments on how the double whammy of rising inflation and a spike in COVID-19 cases would impact the central bank's plan to potentially start withdrawing its stimulus.

"The Fed might taper towards the end of this year, but we expect it to not hike rates at least until the end of 2022," said Sam Stovall, chief investment strategist at CFRA Research in New York.

"We think inflation will gradually come down towards the end of this year, but still would remain above the Federal Reserve's target."

The June reading of the personal consumption expenditures price index - the Fed's main inflation measure - is due on Friday.

The Nasdaq Composite was up 0.31% by 9:55 a.m. ET, after posting its worst session in more than two months on Tuesday.

Dow climbs as US stocks open higher

The Dow Jones Industrial Average was down 0.08%, shrugging off a 4.8% jump in Boeing Co following the company's first quarterly profit in almost two years.

The benchmark S&P 500 was down 0.07%.

Microsoft Corp edged 0.1% higher as a boom in cloud services helped it beat Wall Street expectations for revenue and earnings.

Facebook Inc, which competes with Google in web ad sales and is slated to report results late on Wednesday, rose 0.7%.

In other sectors, Starbucks Corp fell 3.1% after it lowered its fiscal 2021 forecast for China sales growth, while Pfizer Inc rose 1.7% as it raised its outlook for full-year sales of the COVID-19 vaccine.

Pfizer raises 2021 COVID-19 vaccine sales forecast to $33.5 billion

Payment company Visa Inc slipped 0.6% despite beating estimates for quarterly profit.

As of July 23, analysts expected earnings at S&P 500 firms to have jumped 78.1% in the second quarter, compared with their estimate of 65.4% growth on July 1.

Advancing issues outnumbered decliners 1.58-to-1 on the NYSE and 2.63-to-1 on the Nasdaq.

The S&P index recorded 24 new 52-week highs and no new lows, while the Nasdaq recorded 18 new highs and 27 new lows.