Traders work on the floor of the New York Stock Exchange (NYSE) during morning trading on January 26, 2023 in New York City.
Michael M. Santiago | Getty Images
Stocks slipped Wednesday as investors awaited the latest policy decision from the Federal Reserve.
The Dow Jones Industrial Average shed 357 points, or about 1.1%. The S&P 500 was down nearly 0.6%. Meanwhile, the Nasdaq Composite was 0.5% lower.
Corporate earnings season continued. Peloton shares rose more than 8% after the fitness equipment company said its net loss narrowed year over year. Advanced Micro Devices shares gained more than 3% after the semiconductor company reported a fourth-quarter earnings beat. Meanwhile, Snap shares dropped more than 11% after the social media company posted a disappointing quarterly revenue.
The Fed at 2 p.m. ET will announce how much it is increasing interest rates in its latest effort to tame high inflation, with market participants expecting a 25 basis point bump from the central bank. The Fed’s announcement will be followed by comments from Chair Jerome Powell.
Some indicators that inflation is easing in the broader economy have investors hoping for a more dovish tone from the Fed. On Tuesday, the employment cost index, a measure of wage increases, showed compensation rose 1% in the fourth quarter, less than the 1.1% estimate by Dow Jones.
Still, traders may be getting ahead of themselves looking for signs that a pause in hikes or even a pivot is coming soon.
The Fed’s message Wednesday “will push back against the pivot narrative and thereby current bond market pricing,” wrote DoubleLine’s Jeffrey Gundlach in a tweet. “Should be interesting.”
Wall Street is coming off a strong session to end January. The Dow ended Tuesday nearly 369 points higher, rising by 1.09%. The S&P 500 gained 1.46% to cap its best January performance since 2019. The tech-heavy Nasdaq Composite rose 1.67%, notching its best January performance in 22 years.