U.S. stocks traded with little change Wednesday as investors awaited a key announcement from the Federal Reserve regarding interest rates.
The S&P 500 index edged up 0.2%, nearing its all-time high set earlier this month. The Dow Jones Industrial Average saw a modest gain of 31 points, or 0.1%, while the Nasdaq composite increased by 0.3%.
The primary focus of the day is the Federal Reserve's decision on interest rates and any indications it may provide about future monetary policy. The Fed had raised its benchmark interest rate the previous month for the first time in three years in an effort to curb high inflation impacting the economy and consumer sentiment.
While many on Wall Street anticipate the Fed will hold rates steady at this meeting, attention is on whether the central bank will offer clues about potential adjustments at later meetings. Federal Reserve Chair Kevin Warsh has previously expressed a preference for the Fed to provide fewer explicit forward guidance signals.
Interest rates significantly influence stock valuations, alongside corporate profitability. Several companies reported strong earnings, exceeding analyst expectations for the summer quarter. GE Healthcare Technologies surged 8% after reporting better-than-expected profit and revenue, also raising its full-year financial forecasts. Etsy climbed 6.6% following a stronger-than-anticipated profit report, with its CEO noting renewed growth in active buyers and sellers.
Stocks within the artificial-intelligence sector showed relative stability after experiencing significant fluctuations earlier in the week due to concerns that high borrowing costs associated with rising interest rates could impact the boom in AI data center construction, which relies heavily on financed investments.
AI-related stocks received a boost from SK Hynix, a South Korean memory chip manufacturer, which saw its stock jump 10.9% in Seoul after reporting strong profits and projecting continued demand outstripping supply through 2030, driven by AI usage. On Wall Street, Micron Technology, also a memory chip provider, gained 5.2%, contributing to the S&P 500's rise.
Conversely, Robinhood Markets fell 3.2% after reporting lower-than-expected profit and revenue for its latest quarter. Boston Scientific experienced an 11.1% decline, despite reporting a smaller-than-expected profit drop, as its forecast for the current quarter fell short of analyst expectations.
In the bond market, Treasury yields remained largely stable. The yield on the 10-year Treasury held at 4.99%, close to recent highs not seen since 2002, though down from its peak earlier this month. Oil prices saw an increase, with Brent crude rising 1.8% to $111.33 per barrel amid ongoing uncertainty in the Middle East and its potential impact on the global energy market.
Internationally, South Korea's Kospi index led gains, rising 6.6%, while Japan's Nikkei 225 advanced 1.1%, and France's CAC 40 added 0.2%.