Markets Wait For Fed Decision As Tech Stocks Rally

U.S. stock markets drifted lower to flat on Wednesday as investors waited for the Federal Reserve to announce its decision on interest rates this afternoon.

The S&P 500 gained 0.2 percent, moving within 1 percent of the record high set earlier this month. The Dow Jones Industrial Average was up 31 points, or 0.1 percent, as of 9:35 a.m. Eastern time. The Nasdaq composite rose 0.3 percent.

The central bank raised its main interest rate last month for the first time in three years to combat high inflation. Most Wall Street analysts expect the Fed to hold the federal funds rate steady at this meeting. The primary question is whether the bank will provide guidance on future moves. Fed Chairman Kevin Warsh has stated since taking office that the agency intends to offer fewer indications about its future policy decisions.

Interest rates and corporate earnings are the two main drivers of stock prices. Several companies reported better-than-expected profits for the summer quarter on Wednesday. GE Healthcare Technologies jumped 8 percent after beating profit and revenue forecasts. The company also raised its full-year financial outlook.

Etsy shares climbed 6.6 percent following a quarterly profit that exceeded analyst estimates. CEO Kruti Patel Goyal said the platform saw active buyers grow from prior-year levels for the first time in two years. The active seller base also grew at its fastest rate in two years.

Artificial intelligence stocks remained stable after volatile trading earlier in the week. Investors had worried that high borrowing costs would hurt the boom in AI data centers, which rely heavily on debt financing. South Korea's SK Hynix, a major memory chip maker, saw its stock soar 10.9 percent in Seoul after reporting strong profits. The company said demand for its chips would continue to outpace supply through 2030 due to rising AI usage.

Micron Technology, another computer memory seller, jumped 5.2 percent in the U.S. and was the largest contributor to the S&P 500's gains. This performance helped offset a 3.2 percent drop in Robinhood Markets, which reported weaker profit and revenue than expected. Boston Scientific fell 11.1 percent despite a milder profit decline than forecast, as its guidance for the current quarter missed analyst expectations.

In the bond market, the yield on the 10-year Treasury held at 4.99 percent, unchanged from late Tuesday. This level is near the high end of the range seen since yields started rising from 3.97 percent before the war with Iran increased oil prices and inflation concerns. The yield had topped 5.30 percent earlier this month, its highest level since 2002. Brent crude oil prices rose 1.8 percent to $111.33 per barrel amid ongoing uncertainty in the Middle East. South Korea's Kospi index led global gains with a 6.6 percent jump, followed by a 1.1 percent rise in Japan's Nikkei 225 and a 0.2 percent increase in France's CAC 40.