U.S. stocks were drifting lower in midday trade Wednesday ahead of the Federal Reserve’s interest-rate decision which is due out 2 p.m. Eastern, followed by Chairman Jerome Powell’s press conference beginning at 2:30 p.m..
How are stock indexes trading?
The Dow Jones Industrial Average
dropped 361 points, or 1.1%, to 33,723
The S&P 500
lost 22 points, or 0.6% to 4,053
The Nasdaq Composite
fell 29 points, or 0.3% to 11,554
On Tuesday, the Dow industrials climbed 368.95 points, or 1.1%, to end at 34,086.04, the S&P 500 gained 58.83 points, or 1.5%, to finish at 4,076.60, and the Nasdaq Composite gained 190.74 points, or 1.7%, ending at 11,584.55.
What’s driving markets?
U.S. stock indexes traded lower on Wednesday as investors look ahead to the latest policy decision from the Federal Reserve. The central bank is expected to release its latest policy statement at 2 p.m. Eastern, and Fed Chair Jerome Powell will brief the media at 2:30 p.m.
Most market watchers are forecasting a 25-basis point interest rate increase from the Fed, but more attention will be focused on any commentary from Powell that pushes back against markets’ expectations that the central bank has reached peak policy rates, and will start to lower them by year end.
Powell is expected to reiterate the Fed’s determination to keep fighting inflation, noted Randy Frederick, managing director of trading and derivatives at Schwab Center for Financial Research. “Unfortunately, even as we expected that, the market has an likelihood to sell off, even when he does finally say those words,” said Frederick.
See: Why Fed vs. markets showdown leaves Powell at disadvantage
Treasury yields were lower ahead of the release of the decision, with the 10-year U.S. Treasury Note
yielding 3.6%, and the yield on the policy-sensitive 2-year Treasury note
slipped to 4.20%.
U.S. dollar index
which measures the greenback against six major peers, fell 0.3% to 101.81.
In U.S. economic data on Wednesday, the ISM, or Institute for Supply Management said its January manufacturing sector activity index fell to 47.4% in January from 48.4% in the prior month.
The ISM manufacturing index stood “just moderately below 50. Frankly, that’s kind of in line with what the Fed has been trying to engineer all wrong, which is a slight slowdown in the economy without major recession coming into play,” said Frederick.
U.S. job openings rose to 11 million in December from 10.4 million. The number of U.S. workers quitting in December dipped to 4.09 million from 4.1 million in the prior month.
ADP said the private sector added 106,000 jobs in January. It is a significant drop from the revised 253,000 jobs added in December. Economists forecasted an increase of 190,000.
Apart from the Fed outcome, investors will get two more big central bank decisions this week, from the European Central Bank and Bank of England, both expected to hike another 50 basis points on Thursday. Fresh data showed eurozone inflation for January coming in lower than expected on Wednesday, at a rise of 8.5%, the lowest since May.
Corporate earnings season continued. Shares of Snap Inc.
slumped 14% on Wednesday after the social-media group posted a disappointing quarterly revenue and offered no guidance. Peloton Interactive Inc.
shares went up nearly 20% after the company posted a $335.4 million loss for its latest quarter. Still it indicated improvement from the connected-fitness company’s cash-burning peaks.
is expected to report its third consecutive quarterly sales decline when it issues results after the close on Wednesday.
Read: Tech stocks just had their best January in decades — here’s why that may not be a good sign
Companies in focus
Advanced Micro Devices
shares jumped 8.7% Wednesday after the chip maker’s data-center sales rose and executives predicted sales of more than $5 billion to start 2023.
Electronic Arts Inc.
stock fell 12.2% after the gaming company delivered a downbeat forecast and shelved mobile versions of two popular games.
Match Group Inc.
shares plunged 9.6% after the online-dating company met revenue expectations for its latest quarter but fell short with its first-quarter outlook, while saying that at least the first half of the year could remain “challenging.”
topped Wall Street expectations for its fourth quarter, but the drug maker’s shares fell 3.9% as its 2023 guidance fell on the lower end of Wall Street’s expectations.
shares went up 1.2% after the company said it intends to lay off about 4% of its staff as cutbacks in the software industry intensify.
shares rose 0.4% after the company reported Wednesday fourth-quarter profit that beat expectations but revenue that came up a bit shy, while predicting “robust” Medicare Advantage membership growth in 2023.
shares edged up 0.9% after the company said it expects continued strong growth in its customer base this year, though not as robust as what was seen in 2022.
— Barbara Kollmeyer contributed reporting to this article.