Stocksclosed mixed in a volatile session onWednesday after the Federal Reserve left its key interest rate unchanged, as expected, but indicated that its next move will probably be to cut rates.
The Dow Jones Industrial Average, which had jumped more than 500 points,rose just 87.37 points, or 0.2%, to 37,903.29. The S&P 500 and the Nasdaq both fell 0.3%.
The Federal Open Markets Committee (FOMC) concluded its two-day monetary policy meeting by letting the Fed funds target rate stand at 5.25%-5.50%.
“Powell didn’t rock the boat very much,” said Ryan Detrick, chief market strategist at Carson Group in Omaha. “He acknowledged that inflation is still a problem but remained optimistic that it will improve over the coming quarters.”
“What sparked today’s rally was when he said the next move will not be a hike,” Detrick added. “He pushed back against that, hard. … That allowed the bulls to take charge.”
The accompanying statement left the timing of any rate cut in doubt, and Fed officials underscored their concern that the first months of 2024 have done little to build the confidence they seek in falling inflation.
At a press conference, Chair Powell said the central bank remains committed to its 2% inflation target and that the labor market was normalizing, citing data released on Wednesday showing job openings dropping to a three-year low.
First-quarter reporting season has breezed passed the halfway point, with 310 of the companies in the S&P 500 index having reported. Of those, 77% posted consensus-beating earnings, according to LSEG.
Analysts now expect aggregate first-quarter S&P 500 earnings growth of 6.6% year-on-year, a significant improvement over the 5.1% estimate as of April 1, LSEG data showed.
Among individualcompanies,Advanced Micro Devicesshed 8.9% after its disappointingartificial intelligencechip sales forecast, whileSuper Micro Computerslid 14% following the company’s quarterly revenue miss.
Amazonrose 2.2% on better-than-expected quarterly results as interest inAIhelped drive cloud-computing growth.
Johnson & Johnson advanced4.6%afteritsaidit will proceed with a proposed $6.48 billion lawsuit settlement over allegations that its baby powder and other talc products cause ovarian cancer.
Starbuckstumbled 16%afterthe coffee chaincut itssales forecastas it postedthefirst drop in same-store sales in nearly three years.
CVS Health plunged 17% after the healthcare company’s earnings fell short of consensus and it slashed its annual profit forecast.