Stock Market Dips as Fed’s Hawkish Pause Dampens Sentiment; Big Tech Earnings Await

The S&P 500 closed lower Wednesday as investors reacted to the Federal Reserve’s hawkish stance and awaited earnings from major tech firms. The Dow Jones Industrial Average fell 137 points (0.3%), while the S&P 500 and NASDAQ each dropped 0.5%.

The Fed held interest rates steady but removed language suggesting progress toward its 2% inflation target, signaling fewer rate cuts than previously expected. Traders adjusted their forecasts, anticipating a more prolonged period of elevated borrowing costs. Analysts at Jefferies noted that the Fed’s policy stance remains flexible, keeping rate hikes and cuts both on the table.

Investors are now focused on earnings from major tech players, including Microsoft (MSFT), Meta (META), and Tesla (TSLA), which report after Wednesday’s close, followed by Apple (AAPL) on Thursday. These companies, part of the “Magnificent 7” stocks that have driven market gains, will likely face scrutiny on AI investments, particularly after a recent tech selloff triggered by DeepSeek-related concerns.

Chip stocks rebounded after Dutch semiconductor giant ASML (ASML) exceeded earnings expectations, signaling robust demand. Meanwhile, T-Mobile (TMUS) surged 6% on strong wireless subscriber growth, while Starbucks (SBUX) jumped 8% after posting better-than-expected Q1 sales, indicating early success in its turnaround efforts.

Elsewhere, Trump Media & Technology Group (DJT) climbed nearly 7% after announcing the launch of Truth.Fi, a new financial services and fintech brand.

With market uncertainty lingering, investors remain cautious as they digest Fed signals and tech earnings that could set the tone for the broader market.