US stocks fell on Wednesday as investors braced for a wave of Big Tech earnings and for what could be Jerome Powell’s final interest-rate announcement as Federal Reserve chair.
The S&P 500 (^GSPC) lost roughly 0.1%, while the Dow Jones Industrial Average (^DJI) fell roughly 0.4%. Meanwhile, the tech-exposed Nasdaq Composite (^IXIC) fell 0.2% after stocks on Wall Street pulled back from record highs on Tuesday.
Seagate (STX) led an early premarket rally in data-storage sector stocks, up 17% after posting a stronger profit and revenue outlook than expected. Its upbeat earnings gave a lift to hopes for a sustained AI boom that took a knock Tuesday on a report that OpenAI missed its own sales and user targets ahead of its IPO.
That puts the spotlight on Wednesday’s earnings from four members of the “Magnificent Seven”: Alphabet (GOOG), Amazon (AMZN), Meta (META), and Microsoft (MSFT), all set to report after Wednesday’s close. Investors are looking for evidence that the tech megacaps’ heavy spending on AI is translating into meaningful revenue growth.
Markets are also focused on the conclusion of the Fed’s April policy meeting. While no change to interest rates is expected, the policy announcement could be Powell’s final before his term as chair ends in May.
Oil prices rose on Wednesday after the Wall Street Journal reported that President Trump has told aides to prepare for a long-running US naval blockade of the Strait of Hormuz, squeezing the energy market. Brent crude (BZ=F) and US WTI crude (CL=F) prices both increased more than 3% to cross $108 per barrel and $103 per barrel, respectively.
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Avis Budget Group’s stock (CAR) fell as much as 19% on Wednesday morning before paring losses. The stock was down 8% at last check.
Yahoo Finance’s Ines Ferre reports:
The car rental company reported a larger-than-expected profit loss in the first quarter. Avis reported a loss of $8.01 per share, versus consensus estimates for a loss of $6.87, according to Bloomberg data.
Avis has been one of the most volatile stocks in recent weeks following an epic short-squeeze rally that abruptly reversed last week.
The stock had surged to a high of $847 before plunging.
Read more here.
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The Bank of Canada left interest rates unchanged at its policy-setting meeting on Wednesday, setting the stage for a Federal Reserve decision in which the US rate-setting body is expected to do the same.
The Bank of Canada Governing Council, led by Governor Tiff Macklem, left the target rate for the Canadian economy at 2.25%, matching economists’ expectations.
“There may still be a need to adjust the policy rate depending on how the risks evolve,” Macklem said at the meeting.
In commentary on the decision, the Bank of Canada cited Iran war-driven inflation and a fractious US trade policy stance as major risk factors for the Canadian economy.
“We are closely monitoring the impact of the conflict in the Middle East and how the economy is responding to US tariffs and trade policy uncertainty,” the policy body wrote. “Governing Council is looking through the war’s immediate impact on inflation but will not let higher energy prices become persistent inflation.”
Traders are unanimous in bets that the US Federal Open Markets Committee will vote to hold US rates steady at a target range of 3.5% to 3.75% when the Federal Reserve meets at 2:30 p.m. ET.
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US stocks slipped on Wednesday as the market prepared for earnings from four out of the seven “Magnificent Seven” tech leaders and a rate decision from the Federal Reserve in what is likely to be Jerome Powell’s final meeting as Fed chair.
The S&P 500 (^GSPC) shed roughly 0.2%, while the Dow Jones Industrial Average (^DJI) declined by around 0.1%. Meanwhile, the tech-exposed Nasdaq Composite (^IXIC) fell 0.5% after stocks on Wall Street pulled back from record highs on Tuesday.
Alphabet (GOOG), Amazon (AMZN), Meta (META), and Microsoft (MSFT) will all report earnings after Wednesday’s close, and investors will be focused on whether sky-high spending figures are translating into real growth.
In Washington, no change to interest rates is expected at today’s Fed meeting, leaving Jay Powell’s last time at the podium as the core focus. Investors will also be watching for further commentary on the economic fallout of the Iran war.
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Oil prices rose on Wednesday after reports that the White House is buckling down for a continued blockade of the Strait of Hormuz, threatening further pressure on an already tight global energy market.
Futures on Brent crude (BZ=F), the international benchmark, gained roughly 3.3% to trade above $114 per barrel, according to Bloomberg data. Those on US benchmark West Texas Intermediate crude (CL=F) picked up up 3.4% to trade around $103 per barrel.
Prices advanced overnight after the Wall Street Journal reported that Trump told aides to prepare for a long-running blockade of the Strait of Hormuz, the world’s most critical waterway for global energy flows.
The US leader sees the blockade, which it is using to squeeze the Iranian economy, as a better option than resuming direct conflict or walking away from the war, according to the Journal.
The president said Wednesday morning in a Truth Social post that Iran “can’t get their act together,” and that “they don’t know how to sign a nonnuclear deal.” In a previous post on Tuesday, Trump said Iran told the White House that the regime is “in a State of Collapse,” and that Tehran wants the US to end its naval blockade of the Strait of Hormuz “as soon as possible.”
Read more here.
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Amazon is expected to report its first quarter earnings after the bell on Wednesday. Yahoo Finance’s Daniel Howley takes a look at what’s in focus
He writes:
Amazon (AMZN) will report its first quarter earnings alongside rivals Google (GOOG, GOOGL), Meta (META), and Microsoft (MSFT) on Wednesday, with investors looking for more signs that the company’s massive artificial intelligence spending is paying off.
All totaled, the AI hyperscalers are expected to spend a whopping $650 billion in capital expenditures in 2026, and Amazon will account for $200 billion of that.
Despite that, Wall Street has been largely positive on Amazon, with the stock of the cloud and e-commerce giant up 13% year to date. That’s better than Google’s 12% increase, and well ahead of Microsoft, which is down 12%.
… The company’s Amazon Web Services (AWS) revenue is estimated to be $36.79 billion, up 25% from the same period last year.
Investors will be especially interested in Amazon’s remaining performance obligations (RPOs), or contracts the company has signed with customers but hasn’t yet been paid for.
In Q4, Amazon said it has RPOs of $244 billion. The number provides Wall Street with a sense of how much demand Amazon is seeing for its cloud platform and how much of that it’s able to serve.
Read more here.
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Yahoo Finance’s David Hollerith reports:
SoFi posted a solid quarter of growth on Wednesday, even as its banking-as-a-service platform struggles.
Adjusted net revenue for SoFi climbed 41% to a record $1.1 billion, exceeding analyst estimates for $1.05 billion, according to data compiled by Bloomberg.
“We had an excellent first quarter,” CEO Anthony Noto said in a statement, citing how the company added 1.1 million new members during the period, bringing its total user base up 35% to 14.7 million.
On a non-adjusted basis, profits for the San Francisco, Calif.-based fintech bank reached $167 million, or $0.12 per share, in line with what the Street expected. Adjusted EBITDA also beat analyst expectations, rising 62% year over year to $340 million.
SoFi’s stock sank 8% in early Wednesday trading.
Read more here.
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Yahoo Finance’s Jared Blikre reports:
The US 30-year Treasury yield (^TYX) is back near the danger zone that has sent stocks tumbling before.
That zone is roughly 5%. It has acted like a ceiling for the long bond several times over the past three years, with each approach tightening financial conditions before yields backed off.
… Bond prices have been compressing for months, with lower highs pressing against a flat floor. Translation: Buyers keep defending the same level, but each bounce is getting weaker.
The 30-year yield is showing the mirror image. It has been making higher lows beneath the same 5% ceiling, tightening the squeeze between rising support and a level investors already know can hurt.
RSM chief economist Joe Brusuelas framed the political risk early. In December 2024, before Trump took office, Brusuelas said, “The stock market [was] the barometer of the first Trump administration. So, the bond market’s likely to be [that of] the second.”
Read more here.
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Robinhood (HOOD) stock slid around 10% in premarket trading on Wednesday as the company said its Q1 profit and revenue fell short of Wall Street estimates.
Yahoo Finance’s David Hollerith reports:
The financial app provider said on Tuesday that profits rose 3% from the prior year to $346 million, or $0.38 per share, while net revenue rose 15% from the first quarter of last year to $1.07 billion.
Analysts were expecting $382 million, or $0.42 per share, and net revenue of $1.14 billion, according to data compiled by Bloomberg.
A big source of revenue for Robinhood, fees from crypto trades, fell 47% from the first quarter of last year, driven by a slump across the digital asset world that kicked off late last year and worsened through early February. The figure was slightly lighter than analysts expected.
“I can’t tell you what the price is going to be in three months. You know, [the] price moves up and down, but what I can tell you is crypto as technology infrastructure is going to be big and we’re investing,” Tenev said during the Tuesday earnings call when asked for the outlook for digital assets.
Read more here.
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Reuters reports:
Shares of storage companies jumped in extended trading on Tuesday, after strong revenue and profit forecasts from Seagate Technology (STX) signaled that spending by enterprises on artificial intelligence equipment will remain strong.
Seagate’s strong forecast and the late-day surge in storage stocks underscore investors’ confidence that enterprise AI spending will sustain demand for data-storage equipment despite broader market concerns about the pace of AI adoption.
Companies have funneled increasing amounts of money into data drives, hard disks and other digital storage as they rushed to upgrade their artificial intelligence models and infrastructure.
Shares of Seagate soared 16% in extended trading, while Western Digital (WDC) jumped 10%, Micron Technology (MU) climbed 3% and SanDisk (SNDK) rose 4%, adding a combined $60 billion to the four storage technology companies’ market value.
Read more here.
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Bloomberg reports:
Gold (GC=F) steadied after a two-day drop as investor focus remained on talks between the US and Iran, with the indefinite closure of the Strait of Hormuz continuing to heighten inflation risks.
Bullion was near $4,590 an ounce, after falling 2.4% over the previous two sessions to the lowest in almost four weeks. President Donald Trump said Iran has asked the US to lift a naval blockade of Hormuz while the two sides negotiate an end to the two-month war, which has upended global energy supplies. Mediators in Pakistan expect Tehran will submit a revised proposal in the next few days, CNN reported.
Traders are also keeping tabs on interest-rate decisions in the US, the European Union, the UK and Canada in coming days. On Tuesday, the Bank of Japan left its benchmark rate unchanged at 0.75%, with a split vote suggesting increased odds of a hike in June.
Read more here.