U.S. stocks finished mixed on Wednesday as investors digested a contentious Federal Reserve rate decision, rising oil prices tied to the Iran standoff, and a massive wave of after-hours earnings from four of the Magnificent Seven. The Dow Jones Industrial Average extended its losing streak to five sessions, weighed down by energy-driven inflation fears, while the tech-heavy Nasdaq eked out a fractional gain as chip and software names held firm ahead of the evening’s earnings deluge.
The Dow fell 280.12 points, or 0.57%, to close at 48,861.81. The S&P 500 (SPI:SP500) slipped 2.82 points, or 0.04%, to 7,135.98. The Nasdaq Composite managed a gain of 9.44 points, or 0.04%, finishing at 24,673.24. Trading volume was elevated as market participants positioned themselves ahead of results from Alphabet, Microsoft, Amazon, and Meta, all reporting after the closing bell. The session’s narrow ranges reflected a market caught between competing forces: optimism around corporate earnings season and anxiety over the Fed’s increasingly fractured policy outlook.
The Fed Factor
The Federal Reserve voted 8-4 to hold its benchmark rate in the 3.5%-3.75% range, marking the most divided decision since October 1992. The committee acknowledged that “inflation is elevated, in part reflecting the recent increase in global energy prices.” Governor Stephen Miran pushed for a quarter-point cut, while three regional bank presidents dissented over the inclusion of an easing bias in the statement. The decision is expected to be one of Chair Jerome Powell’s last before he steps down in mid-May. Markets are now pricing in no rate changes through the rest of 2026 and well into 2027, underscoring the difficult balancing act between stubborn inflation and a softening labor market.
Notable Movers
NXP Semiconductors (NXPI) surged nearly 25% after reporting first-quarter adjusted earnings of $3.05 per share on revenue of $3.18 billion, both topping estimates. The company’s above-consensus guidance for the current quarter added fuel to the rally, making it the session’s standout performer. Seagate Technology (STX) climbed about 15% on strong fourth-quarter revenue guidance of $3.45 billion and adjusted earnings of $5 per share. Starbucks (SBUX) jumped more than 8% after beating second-quarter estimates and raising its full-year outlook, now expecting global same-store sales growth of at least 5%. Visa (V) added nearly 5% after posting 17% revenue growth, its strongest since 2022. On the downside, Robinhood Markets (HOOD) tumbled roughly 9% after missing on both earnings and revenue, with crypto trading fees plunging 47%. Enphase Energy (ENPH) dropped more than 11% on weak guidance and soft U.S. residential solar demand. Bill Ackman’s Pershing Square USA (PSUS) sank 16% in its trading debut after a $5 billion IPO that priced at the low end of expectations.
Looking Ahead
All eyes now turn to the after-hours earnings reports from Alphabet, Microsoft, Amazon, and Meta, which have the potential to set the tone for the rest of the week. Any surprises on AI spending or cloud growth could trigger significant moves across the tech sector Thursday morning. Meanwhile, oil prices remain elevated as President Trump reportedly told aides to prepare for an extended blockade of Iranian ports, keeping energy costs and inflation expectations front and center. With Powell’s tenure winding down and a deeply divided Fed, investors should watch closely for any signals about the direction of monetary policy under incoming leadership. Economic data on tap later this week, along with Apple’s earnings on Thursday, will round out what is shaping up to be one of the most consequential weeks of the quarter.