S&P 500 and Nasdaq slipped from record highs ahead of the Fed decision

Despite cautious market sentiment amid stalled US-Iran peace talks, the US major indices, S&P 500 and Nasdaq 100, reached fresh all-time highs on Tuesday. However, both indices retreated slightly afterwards, with the S&P 500 down 0.5% and the Nasdaq 1%, as investors adopted a wait-and-see approach ahead of the Federal Reserve’s policy decision and Chairman Jerome Powell’s commentary. Uncertainty around the stalled peace talks and oil market volatility following the UAE’s OPEC exit announcement contributed to the pullback.

Strong Corporate Earnings Boost Momentum

Solid earnings from General Motors and Coca-Cola lifted market sentiment. Coca-Cola exceeded revenue and profit expectations, citing strong global volume growth and raising its earnings outlook. Coca-Cola (KO) stock surged 6% on a strong earnings beat. General Motors also beat Q1 earnings and revenue estimates and raised its full-year EPS guidance. On the other hand, United Parcel Service (UPS) delivered a revenue beat despite a 5% stock drop on cautious guidance.

Markets Brace for Fed Decision and Tech Earnings

Wall Street opened with moderate losses on Wednesday, with all three major indices extended lower as investors and traders await the upcoming Federal Reserve meeting outcome, which begins Tuesday and concludes on Wednesday.

Interest rates are anticipated to remain steady by the Federal Reserve. Nonetheless, traders are expected to focus on Jerome Powell's policy statement and comments during what is expected to be his last press conference as chair, making this event a major catalyst. Reports of a possible extended U.S. naval blockade in the Strait of Hormuz have added fresh inflation concerns ahead of a key policy decision from the U.S. Federal Reserve.

Additionally, investors await quarterly earnings from tech giants Amazon, Alphabet, Meta, and Microsoft after Wednesday’s close. Key areas to watch include AI infrastructure spending, consumer demand resilience, and margin management amid elevated input costs.

 

This marketing material is provided for informational purposes only and does not constitute investment advice, a recommendation, or an offer or solicitation to buy or sell any financial instruments.

Trading in securities involves significant risk and may not be suitable for all investors. Prices of securities may fluctuate significantly and may result in a total loss of your investment. Investors should be aware that losses may exceed potential profits when buying and selling securities. In certain market conditions, you may sustain losses that exceed your initial investment. Securities and contracts for differences are complex financial instruments that require a high level of knowledge and understanding. You should carefully consider whether you understand how these instruments work and whether you can afford to take the high risk of losing your money.