U.S. stocks displayed a mixed performance on Wednesday following the Federal Reserve’s decision to maintain interest rates within the range of 3.5% to 3.75%—the first policy decision of the year. On this occasion, the S&P 500 index experienced a brief bounce above the 7,000 mark for the first time, driven by optimism surrounding upcoming earnings reports from prominent technology companies.
Initially buoyed by earlier gains, the S&P 500 slipped back slightly after achieving a record close earlier in the session. The tech-focused Nasdaq Composite inched up by 0.1%, while the Dow Jones Industrial Average remained relatively flat.
The Fed’s decision was largely anticipated, as it resulted from a 10-2 vote. Notably, Governors Chris Waller and Stephen Miran voted against the majority, advocating for a 25 basis point cut. As the market keenly awaited statements from Fed Chair Jerome Powell during his press conference, speculative chatter suggested possible future rate cuts, with investors pricing in two quarter-point reductions by the end of 2026.
The day’s trading environment was further complicated by a recent decline in the U.S. dollar, which had raised concerns about a potential economic slowdown. Despite this backdrop, the dollar managed a slight recovery on Wednesday after reaching its lowest level since 2022 the previous day, an event marked by President Trump’s nonchalance over the currency’s fluctuations.
The political landscape surrounding the Federal Reserve has been tense. Recently, the Trump administration initiated a criminal investigation into Powell’s testimony regarding renovations of the central bank’s headquarters, a move that is heightening scrutiny on the institution’s independence. Investors are also speculating on the possibility of Trump announcing Powell’s successor imminently.
In the technology sector, attention turned toward chipmaker ASML, which reported a surprising increase in orders for its chip manufacturing equipment, sparking optimism about a sustained AI boom. Although ASML’s shares dipped slightly, key players such as Nvidia and TSMC—both reliant on ASML’s technology—saw an uptick in their stock values.
As the market awaited earnings reports from major tech players like Microsoft, Meta Platforms, and Tesla, eyes were also set on Apple, with its quarterly update scheduled for Thursday.
Amid all this, a significant rise in Seagate Technology’s stock—up nearly 17%—impressed investors after the company projected higher earnings and revenue for the third quarter, echoing the strong demand for storage solutions driven by AI advancements.
Cryptocurrencies reflected a positive trend ahead of the Fed’s announcement, with Bitcoin rising by 1.9% and Ethereum by 2.9%. Market sentiment around digital currencies is improving, especially with recent legislative steps taken toward clearer regulation.
In chip stocks, ASML set a robust tone, noting record orders far exceeding analyst expectations with a strong demand for advanced semiconductors. Shares of Intel climbed nearly 9% as it stands to benefit from increased demand for CPUs in data centers, affirming confidence in the sustainability of AI-driven technology growth.
Overall, the market’s reaction reflects a combination of optimism for tech earnings and caution over macroeconomic factors, highlighted by the Fed’s policy decision and political developments surrounding the central bank. As Wall Street gears up for earnings announcements from major players, the context of these results could shape the market’s trajectory in the coming weeks.
