Stock indexes showed mixed performance Wednesday as investors assessed tempered optimism regarding trade talks between the United States and China while anticipating guidance from the Federal Reserve later in the session.
The Dow Jones Industrial Average advanced, seeking to recover its 50-day moving average following two consecutive losing sessions. However, the S&P 500 index wavered, and the Nasdaq composite traded lower, both indexes also coming off recent declines but holding above key support levels. Small capitalization stocks tracked by the Russell 2000 saw a modest gain. Volume on the New York Stock Exchange and Nasdaq registered higher compared to the prior day. The Innovator IBD 50 exchange traded fund also posted gains. The yield on the 10-year Treasury note fell.
Markets initially reacted favorably to reports that U.S. officials, including Treasury Secretary Scott Bessent and U.S. Trade Rep. Jamieson Greer, would meet with China counterparts to restart trade discussions. However, those gains pared after Secretary Bessent indicated the upcoming meeting represented only a preliminary step, not advanced negotiations. This tempered outlook follows President Donald Trump's recent imposition of substantial tariffs on Chinese imports and subsequent retaliation from China. Concerns over the trade policy environment persisted among market participants, impacting investor sentiment regarding the Trump's Sweeping Tariffs Wreck Stocks.
Attention now shifts toward the Federal Reserve. Interest rates are widely expected to remain unchanged following the central bank's policy meeting wrapping up Wednesday. Traders currently place expectations for a rate cut no earlier than July, according to data tracked by the CME FedWatch Tool. FED Chair Jerome Powell is scheduled to deliver remarks Wednesday afternoon.
Powell's comments will likely address the economic impact of tariffs and inflationary pressures. The FED chair has consistently signaled a preference for a cautious, wait-and-see approach to policy adjustments.
In corporate news, shares of artificial intelligence server provider Super Micro Computer (SMCI) declined after the company reported third-quarter results showing lower earnings despite sales growth. Conversely, Walt Disney (DIS) stock surged on Wednesday after its earnings report showed increases in both revenue and earnings per share, propelling shares past key moving averages.
Among other individual stocks, Tesla (TSLA) traded lower, struggling to surpass its 200-day moving average. Palantir Technologies (PLTR) recovered ground after experiencing a sharp decline following its earnings release earlier in the week.
Nvidia (NVDA) dipped but held its 50-day line ahead of its first-quarter earnings report expected later this month. Other Dow Jones components experienced varied trading, with Nike (NKE) and Amazon (AMZN) contributing positively, while UnitedHealth Group (UNH) and Boeing (BA) weighed on the index.
Elsewhere, networking company Arista Networks (ANET) shares fell significantly after its earnings report and comments about tariffs impacting contract manufacturers. Advanced Micro Devices (AMD) shares edged higher, testing the 50-day moving average, following its report of rising sales and earnings. Uber Technologies (UBER) slipped after reporting sales that missed analyst estimates, despite exceeding earnings per share projections. Arm Holdings (ARM) stock also saw movement after its earnings release.
