US STOCKS-Wall Street loses steam ahead of Big Tech earnings, Fed meeting

Amazon, Meta Platforms, Microsoft and Google-parent Alphabet are set to report after the closing bell, when investors will gauge how their AI bets are paying off. The results could shape investor confidence in one of the most resilient pockets of ‌the financial markets, after sentiment was slightly dampened following a Wall Street Journal report that said OpenAI had missed its internal targets for weekly users and revenue, reviving fears about the AI spending spree of tech heavyweights.

Wall Street's main indexes were subdued on Wednesday as investors ​treaded carefully ahead of several Big Tech earnings reports and a ‌Federal ​Reserve meeting expected to be the last for Jerome Powell as its Chair. Amazon, Meta Platforms, Microsoft and Google-parent Alphabet are set to report after the closing bell, when investors will gauge how their AI bets are paying off.

The results could shape investor confidence in one of the most resilient pockets of ‌the financial markets, after sentiment was slightly dampened following a Wall Street Journal report that said OpenAI had missed its internal targets for weekly users and revenue, reviving fears about the AI spending spree of tech heavyweights. Market expectations for earnings growth were "exceedingly optimistic," said Ron Albahary, chief investment officer at Laird Norton Wetherby.

"I would worry a little bit about overly excited investors with higher expectations than might be realized," he added. The Philadelphia SE ‌Semiconductor Index rose 1.8%, and has gained 41.7% so far this year.

Amazon added 1.8%, while Microsoft slipped 1%. Meta was flat and Alphabet rose 0.7%. At 12:04 p.m. ET, the Dow Jones ‌Industrial Average fell 337.03 points, or 0.69%, to 48,804.90, the S&P 500 lost 12.24 points, or 0.17%, to 7,126.56 and the Nasdaq Composite dropped 34.20 points, or 0.14%, to 24,629.60.

Ten of the main S&P 500 sectors were in the red. With a 1% decline, materials was the biggest decliner. Healthcare stocks also fell 0.7%. GE Healthcare was the biggest drag on the sector, dropping 12.8% after results.

POWELL'S CURTAIN CALL? Investors will also tune in to what is expected to be Fed Chair Jerome Powell's final press conference ⁠as the ​head of the U.S. central bank. Traders expect the central ⁠bank to leave rates unchanged, but will parse Powell's remarks.

Kevin Warsh, President Donald Trump's pick to lead the Fed, cleared a key procedural hurdle on Wednesday as the Senate Banking Committee voted to advance his nomination to the full Senate. The Fed has ⁠said it is monitoring risks tied to the conflict, and with tensions in the Middle East showing few signs of easing, some investors worry policymakers may have to factor them more heavily into their outlook.

"While Powell's signals may ​be taken with some caution, given that this should be his last press conference, the risks are that he errs on the hawkish side," wrote ING Economics' FX strategist Francesco Pesole. Separately, ⁠a White House official said Trump had met with top officials from Chevron and other energy companies to talk about possible steps to calm oil markets if the blockade of Iranian ports continues for months.

Oil prices were 5.8% higher. Trump has said he ⁠is ​unhappy with Iran's latest proposal for ending the two-month war, which would set aside discussion of its nuclear program until the conflict was concluded and shipping disputes resolved. Meanwhile, U.S. single-family homebuilding increased to a 13-month high in March, exceeding expectations of economists polled by Reuters, data showed on Wednesday. Permits for future construction, however, fell sharply.

Among individual stocks, online brokerage Robinhood Markets fell 14% after missing expectations for first-quarter profit. Shares ⁠of data-storage companies climbed following an upbeat fourth-quarter forecast from Seagate Technology. Seagate jumped 13.8%, while peers Micron Technology, Sandisk and Western Digital gained 3%, 8.3%, and 10%, respectively.

Coffee giant Starbucks rose 9.7% after raising ⁠its annual profit forecast. Payments-processing firms Visa and Mastercard added 8.9% ⁠and 3.8%, respectively, after Visa raised its forecast for full-year earnings.

NXP Semiconductors jumped 24.9% after it said it expects second-quarter revenue and profit above Wall Street expectations. Declining issues outnumbered advancers by a 2.67-to-1 ratio on the NYSE and by a 2.61-to-1 ratio on the Nasdaq.

The S&P 500 posted 19 new 52-week ‌highs and 23 new lows while ‌the Nasdaq Composite recorded 66 new highs and 96 new lows.