U.S. stock indexes opened lower on Wednesday morning as investors digested mixed earnings and awaited the Federal Reserve’s interest-rate decision. This decision has the potential to push borrowing costs to their highest level in 22 years.
Stock Indexes Show Minor Declines
The Dow Jones Industrial Average (DJIA) started off the day with a slight dip of 4 points, leaving it almost unchanged at 35,435. Meanwhile, the S&P 500 (SPX) saw a decline of 0.2% and the Nasdaq Composite (COMP) dropped 0.5%.
Federal Reserve Interest-Rate Hike Expected
Later today, the U.S. central bank is expected to raise interest rates by 25 basis points, marking the 11th increase in nearly a year and a half. The federal funds rate is anticipated to be set between 5.25% to 5.5%. While investors have already factored in this hike, they will be closely watching Fed Chair Jerome Powell’s press conference for signals regarding future policy tightening. There is currently less clarity surrounding what actions policymakers will take in the upcoming September and November meetings.
Microsoft’s Earnings Impact Stock Performance
Microsoft experienced a 2.4% decrease in its stock value on Wednesday morning. The company’s management shared that the process of generating revenue from artificial intelligence-use cases would be gradual. However, Microsoft also revealed an aggressive spending plan to meet the growing demand for its new AI-powered services.
Alphabet Inc.’s Strong Sales Boost its Stock
On a positive note, Alphabet Inc., the parent company of Google, saw its stock rise by 6.6%. This increase followed Wall Street’s positive reception to Alphabet’s strong advertising sales performance, which exceeded profit and sales estimates.