Wall Street Trades Cautiously Ahead Of Big Tech Earnings, Fed Decision

The results are expected to shape confidence in one of the strongest-performing segments of the market.

Ron Albahary, chief investment officer at Laird Norton Wetherby, said market expectations for earnings growth were “exceedingly optimistic” and warned that investors may be setting expectations too high ahead of the results.

Source : Pexel

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Key points generated by AI, verified by newsroom

• Tech earnings and Fed meeting create cautious investor sentiment.
• Major indexes dip; semiconductors and select tech stocks rise.
• Oil prices surge amid Middle East tensions and energy talks.

Wall Street’s main indexes were subdued on Wednesday as investors adopted a cautious stance ahead of earnings from major technology companies and a Federal Reserve meeting expected to be the last chaired by Jerome Powell.

Big Tech Earnings In Spotlight

Amazon, Meta Platforms, Microsoft and Google-parent Alphabet are scheduled to report earnings after the closing bell, with investors closely watching for signs of how their artificial intelligence investments are performing. The results are expected to shape confidence in one of the strongest-performing segments of the market.

AI Spending Concerns Resurface

Investor sentiment in the technology sector was slightly dampened after a Wall Street Journal report said OpenAI had missed its internal targets for weekly users and revenue, reviving concerns over the scale of AI-related spending by major technology firms.

Ron Albahary, chief investment officer at Laird Norton Wetherby, said market expectations for earnings growth were “exceedingly optimistic” and warned that investors may be setting expectations too high ahead of the results.

Major Indexes Trade Lower

At 12:04 PM ET, the Dow Jones Industrial Average was down 337.03 points, or 0.69 per cent, at 48,804.90. The S&P 500 fell 12.24 points, or 0.17 per cent, to 7,126.56, while the Nasdaq Composite declined 34.20 points, or 0.14 per cent, to 24,629.60.

Semiconductor Stocks Buck Broader Weakness

The Philadelphia SE Semiconductor Index rose 1.8 per cent and has gained 41.7 per cent so far this year. Among major technology stocks, Amazon added 1.8 per cent and Alphabet rose 0.7 per cent. Meta Platforms was flat, while Microsoft slipped 1 per cent.

Most Sectors In Red

Ten of the 11 main S&P 500 sectors traded lower, with materials emerging as the biggest laggard after declining 1 per cent. Healthcare stocks also weakened by 0.7 per cent, with GE Healthcare dropping 12.8 per cent after its results.

Focus Turns To Powell’s Expected Final Press Conference

Investors are also awaiting what is expected to be Federal Reserve Chair Jerome Powell’s final press conference as head of the US central bank. Markets widely expect the Fed to leave interest rates unchanged, though investors will closely analyse Powell’s remarks for policy signals.

Kevin Warsh, President Donald Trump’s nominee to lead the Federal Reserve, advanced on Wednesday after the Senate Banking Committee voted to move his nomination to the full Senate.

Oil Surge, Middle East Risks Add To Concerns

The Federal Reserve has said it is monitoring risks linked to the ongoing conflict in the Middle East. With tensions showing few signs of easing, some investors fear policymakers may need to weigh geopolitical risks more heavily in their outlook.

ING Economics FX strategist Francesco Pesole said that while Powell’s comments may be treated cautiously given the likelihood of this being his final press conference, there remains a risk that he could adopt a hawkish tone.

Oil prices rose 5.8 per cent after a White House official said President Donald Trump had met top energy executives, including officials from Chevron, to discuss possible measures to stabilise oil markets if the blockade of Iranian ports continues for months. Trump has said he is unhappy with Iran’s latest proposal for ending the two-month war.

Economic Data Mixed

US single-family homebuilding rose to a 13-month high in March, exceeding economists’ expectations, though permits for future construction fell sharply.

Movers In Individual Stocks

Among notable stock moves, Robinhood Markets dropped 14 per cent after missing first-quarter profit expectations. Seagate Technology surged 13.8 per cent after issuing an upbeat fourth-quarter forecast, lifting peers across the data-storage segment. Micron Technology gained 3 per cent, Sandisk rose 8.3 per cent and Western Digital climbed 10 per cent.

Starbucks advanced 9.7 per cent after raising its annual profit forecast, while payments firms Visa and Mastercard gained 8.9 per cent and 3.8 per cent respectively after Visa lifted its full-year earnings forecast. NXP Semiconductors jumped 24.9 per cent after forecasting second-quarter revenue and profit above Wall Street expectations.

Market Breadth Weakens

Declining stocks outnumbered advancing issues by 2.67-to-1 on the NYSE and by 2.61-to-1 on the Nasdaq. The S&P 500 recorded 19 new 52-week highs and 23 new lows, while the Nasdaq Composite posted 66 new highs and 96 new lows.