The S&P 500, Dow Jones Industrial Average, and Nasdaq all edged lower on Wednesday as investors braced for a packed afternoon of mega-cap earnings and a Federal Reserve policy decision. The Dow fell roughly 252 points, or 0.5%, slipping below the 49,000 mark. The S&P 500 and Nasdaq each declined 0.2%, giving back some of Tuesday's record-high gains.
The pullback comes ahead of earnings from four 'Magnificent Seven' stocks—Alphabet, Meta, Microsoft, and Amazon—all due after the closing bell. The central theme remains AI spending, with investors closely watching whether massive capital expenditures are translating into real revenue.
Market sentiment took a hit on Tuesday after a report suggested OpenAI recently missed its own internal sales and user targets ahead of its IPO, softening AI-linked stocks. Wolfe Research's Chris Senyek noted that 'markets were vulnerable to any whiff of bad news' after a strong rally, predicting consolidation before another move higher.
Seagate bucked the trend, jumping 17% in premarket after beating profit and revenue expectations, offering reassurance that AI infrastructure demand remains intact.
At 2:30 p.m. ET, Fed Chair Jerome Powell will hold a press conference following the April policy meeting. No rate change is expected, but markets will watch closely as this could be his final meeting before his term ends in May. Market participants price in a 95% probability of a 25-basis-point rate cut. Treasury yields edged higher ahead of the announcement.
Oil prices surged over 3% after a report that President Trump has asked aides to prepare for a sustained US naval blockade of the Strait of Hormuz. Brent crude crossed $108 per barrel and US WTI topped $103 per barrel. The dollar also ticked higher amid heightened geopolitical tensions.
