Markets Mixed as Fed Decision Looms and Dollar Rebounds/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Wall Street hovered near record highs Wednesday, led by gains in tech and AI-linked stocks. The U.S. dollar showed signs of stabilizing after hitting its weakest level since 2022. Investors await a key Fed decision as earnings season continues with mixed results.
Wall Street and Dollar Rebound — Quick Looks
- S&P 500 Inches Higher: Market hovers near record, up 0.1% in early trading.
- Dow Slips Slightly: Dow down 63 points while Nasdaq gains 0.4%.
- Tech Leads Gains: Nvidia climbs 1.7% amid AI optimism; ASML outlook boosts sentiment.
- Mixed Earnings: Seagate, Starbucks, and Elevance Health report strong results; Amphenol slides.
- Dollar Finds Support: Stabilizes after hitting four-year low on Tuesday.
- Fed Decision Ahead: Investors expect interest rates to remain unchanged.
- Trump Policy Impact: Tariff threats and global uncertainty weigh on U.S. dollar.
- Gold Surges: Gold hits $5,258.70/oz as investors seek stability.
- Global Markets Mixed: Asia rallies while European indexes retreat.
Deep Look: Markets Mixed as Fed Decision Looms and Dollar Rebounds
NEW YORK (AP) — U.S. stock indexes hovered near record highs Wednesday, while the U.S. dollar showed signs of stabilizing following its lowest point in nearly four years.
The S&P 500 edged up 0.1%, continuing its upward momentum, while the Dow Jones Industrial Average dipped 63 points, or 0.1%. The Nasdaq composite rose 0.4%, buoyed by gains in technology and AI-related stocks.
One of the day’s key drivers was Dutch semiconductor equipment manufacturer ASML, which delivered an upbeat revenue forecast for 2026. CEO Christophe Fouquet highlighted strong confidence from clients, driven largely by the AI boom. The announcement helped ease concerns that the enthusiasm surrounding artificial intelligence had led to a speculative bubble.
Leading the rally was Nvidia, often seen as a bellwether for AI. Its stock rose 1.7%, making it the top contributor to the S&P 500’s performance.
Despite ASML’s early gains, its U.S.-listed shares reversed course and ended lower by 1%, reflecting broader volatility in the sector.
Mixed Earnings Stir Market Response
Corporate earnings continued to fuel volatility across sectors. Seagate Technology soared 16.8% after beating analysts’ expectations, with AI demand cited as a major revenue driver. Similarly, Starbucks climbed 5.3%, thanks in part to a viral promotional campaign involving a bear-themed cup, even as it missed profit targets.
Elevance Health gained 4.9%, rebounding from a steep decline the day before when health insurers were rattled by disappointing Medicare Advantage rate proposals from the U.S. government.
On the downside, Amphenol plunged 12.8% despite posting stronger-than-expected quarterly results. Investors likely saw the pullback as a correction after the stock had surged 23% year-to-date, raising expectations to unsustainable levels.
Market analysts noted that companies are under intensifying pressure to deliver strong earnings growth to justify high valuations. “With stock prices already at record levels, any misstep or underwhelming guidance is getting punished,” one strategist noted.
Meanwhile, Apple dipped 0.7% ahead of its highly anticipated earnings release scheduled for Thursday.
Dollar Stabilizes After Steep Fall
In currency markets, the U.S. dollar rebounded modestly, rising against the British pound, Japanese yen, and other currencies. On Tuesday, the dollar index had slumped to its weakest level since early 2022, amid mounting concerns over U.S. economic policy and political stability.
The dollar’s decline has largely been attributed to investor anxiety about President Donald Trump’s foreign policy rhetoric, including recent threats of tariffs on European nations critical of his Greenland annexation comments.
Combined with ballooning federal debt and a shift in global investor sentiment, analysts have dubbed the phenomenon “Sell America.”
Still, the greenback found footing ahead of the Federal Reserve’s interest rate decision, expected later in the day. The central bank is widely anticipated to hold rates steady, having previously slashed them several times last year to support employment.
Though rate cuts can provide economic stimulus, they risk stoking inflation — and may put additional downward pressure on the dollar. Trump has continued to press for lower rates, arguing that they would benefit U.S. exporters by making American goods more affordable abroad.
The 10-year Treasury yield ticked up to 4.25%, a marginal increase from Tuesday’s 4.24%, signaling cautious optimism in bond markets.
Gold Rallies as Investors Seek Safety
As confidence in the dollar wavered, investors turned to precious metals as a hedge. Gold prices surged to an all-time high, crossing $5,000 per ounce for the first time, and closing up 3.5% at $5,258.70.
The flight to gold — and to a lesser extent, other metals — reflects growing investor interest in tangible assets amid heightened geopolitical tensions and domestic uncertainty.
Global Markets: Asia Up, Europe Down
International markets painted a mixed picture.
In Asia, South Korea’s Kospi jumped 1.7%, hitting a new record thanks to a 5.1% surge in SK Hynix, a major chipmaker. Hong Kong’s Hang Seng rose 2.6%, reflecting renewed investor confidence in the region’s tech sector.
In contrast, European markets declined, as investors digested corporate earnings and awaited updates from the Fed and U.S. political developments.
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