(Jan 29): US stocks pulled back from session highs on Wednesday ahead of earnings reports from the likes of Microsoft Corp and Meta Platforms Inc and the Federal Reserve’s interest-rate decision this afternoon.
The S&P 500 Index pared earlier gains to 0.1% at 11.05am in New York, pulling back after the benchmark surpassed the 7,000-point milestone for the first time. An equal-weight version of the index turned red mid-morning, with more stocks falling than rising. Declines in healthcare and industrial stocks offset gains in the energy and technology sectors. Amphenol Corp was the worst-performing stock in the index after it released underwhelming guidance.
The tech-heavy Nasdaq 100 Index rose 0.4%, while the Dow Jones Industrial Average was little changed.
The US stocks benchmark “came out of the gate hot, although the index has since faded off the highs,” Vital Knowledge founder Adam Crisafulli wrote on Wednesday. He said the decline in Amphenol and others speaks to “high expectations” for the tech sector. Earnings in the rest of the market have been “mixed” since Tuesday’s close, he added.
A big test of tech sector optimism is due after markets close, when Microsoft, Meta and Tesla Inc are all due to report earnings. Apple Inc reports after the market closes on Thursday.
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Amazon.com Inc, another member of the Magnificent Seven group of megacap tech companies, said it was cutting 16,000 corporate jobs across the company in an organisational restructuring.
Traders’ attention is turning to the Fed’s interest-rate decision and chair Jerome Powell’s comments later in the afternoon. The market is anticipating a hold in what will be the first Fed decision since Powell said the central bank was subpoenaed by the Department of Justice amid ongoing pressure from the White House to lower interest rates.
See also: S&P 500 hits record high as dollar selloff deepens
Weakness in the US dollar increases the risk that Powell “makes hawkish rate comments,” Dennis DeBusschere, president and chief market strategist at 22V Research LLC.
Still ahead this week, investors will get a data on jobless claims, durable goods orders and the US trade balance on Thursday, as well as producer prices on Friday.
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