NEW YORK: Wall Street’s main indexes were subdued 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.
Market expectations for earnings growth were “exceedingly optimistic,” said Ron Albahary, chief investment officer at Laird Norton Wetherby.
“I would worry a little bit about overly excited investors with higher expectations than might be realized,” he added.
The Philadelphia SE Semiconductor Index rose 1.8 percent, and has gained 41.7 percent so far this year.
Amazon added 1.8 percent, while Microsoft slipped 1 percent. Meta was flat and Alphabet rose 0.7 percent.
At 12:04 p.m. ET, the Dow Jones Industrial Average fell 337.03 points, or 0.69 percent, to 48,804.90, the S&P 500 lost 12.24 points, or 0.17 percent, to 7,126.56 and the Nasdaq Composite dropped 34.20 points, or 0.14 percent, to 24,629.60.
Ten of the main S&P 500 sectors were in the red. With a 1 percent decline, materials was the biggest decliner.
Healthcare stocks also fell 0.7 percent. GE Healthcare was the biggest drag on the sector, dropping 12.8 percent after results.
Investors will also tune in to what is expected to be Fed Chair Jerome Powell’s final press conference as the head of the US central bank. Traders expect the central bank to leave rates unchanged, but will parse Powell’s remarks.
Kevin Warsh, President Donald Trump’s pick to lead the Fed, cleared a key procedural hurdle on Wednesday as the Senate Banking Committee voted to advance his nomination to the full Senate.
The Fed has said it is 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.