Wall Street finished in a mixed fashion during Wednesday's deals (Thursday AEST), as investors weighed surging oil prices, a closely watched Federal Reserve policy decision, and a wave of major corporate earnings released after the closing bell.
The three major U.S. stock indices fluctuated throughout the session following the Federal Reserve’s announcement that it would hold interest rates steady.
The decision revealed the most divided vote among policymakers since 1992, amid growing uncertainty around the economic outlook, particularly as energy prices climb amid escalating tensions in the Middle East.
The Dow Jones Industrial Average recorded its fifth consecutive day of losses, falling 280.1 points, or 0.6%, to close at 48,861.8. The S&P 500 edged down 2.8 points, or 0.04%, to 7,136.0, while the Nasdaq Composite managed a modest gain of 9.4 points, or 0.04%, to finish at 24,673.24.
Oil prices extended their rally, underpinning inflation concerns. Gains accelerated after The Wall Street Journal reported that U.S. President Donald Trump had instructed aides to prepare for a prolonged blockade of Iranian ports.
Additional upward pressure followed an Axios report that the U.S. had rejected Iran’s proposal to reopen the Strait of Hormuz, with the naval blockade set to remain until an agreement is reached over Tehran’s nuclear programme.
U.S. West Texas Intermediate crude futures surged 7.2% to settle at US$107.16 per barrel, while Brent crude rose 6.8% to close at $118.80 a barrel.
Federal Reserve Chair Jerome Powell acknowledged the inflationary implications of rising energy costs, stating during his post-meeting press conference that elevated oil prices are likely to push overall inflation higher in the near term.
The Federal Open Market Committee voted 8-4 to keep the federal funds rate unchanged within a range of 3.5% to 3.75%, marking the first time since October 1992 that four members dissented.
The April meeting is expected to be Powell’s final one as chair before his term concludes in May. However, he indicated that he intends to remain on the Board of Governors beyond his chairmanship.
Meanwhile, Kevin Warsh, nominated by President Trump, appears poised to succeed Powell as the next Fed chair.
Markets had broadly anticipated that the central bank would leave rates unchanged.
Attention later shifted to earnings from major technology companies, with Alphabet, Amazon, Meta Platforms, and Microsoft all scheduled to report after the close.
The technology sector had come under pressure in the previous session after reports that OpenAI missed its internal revenue and user growth targets.
Despite this, some semiconductor and storage-related stocks posted strong gains. Seagate Technology and NXP Semiconductors surged 11.1% and 25.6%, respectively, after delivering earnings beats and issuing upbeat revenue guidance.
SanDisk and Western Digital also advanced 6.2% and 5.6%, respectively.
Elsewhere, Robinhood Markets fell 13.2% after missing first-quarter profit expectations. In contrast,
Starbucks rose 8.5% after lifting its full-year profit outlook, while Visa gained 8.3% after raising its earnings forecast.
On the bond markets, yields moved higher, with the 10-year Treasury yield rising 1.8% to 4.43% and the 2-year yield climbing 2.7% to 3.947%.
