TLDR
- US stock futures were mixed early Wednesday, with Dow futures down and Nasdaq-100 futures up.
- The Fed is expected to hold rates at 3.75% to 4%, with a 92% chance of no change.
- Microsoft and Alphabet report earnings after the bell, with AI demand and spending plans in focus.
- Broadcom rose 4% Tuesday after banks announced $63 billion in financing for chips leased to Anthropic.
- Microsoft offered buyouts to up to 60,000 employees before its report.
US stock futures were mixed early Wednesday as investors waited for a Federal Reserve decision. Earnings from Microsoft and Alphabet are also due after the bell.
Dow futures fell 0.2% to 0.3%. Nasdaq-100 futures rose between 0.3% and 0.5%, while S&P 500 futures were close to flat.
The S&P 500 and Nasdaq have posted back-to-back gains this week. All major averages ended Tuesday higher.
Chip Stocks Lead Tuesday’s Rally
Chip stocks drove Tuesday’s gains, and the Nasdaq Composite rose 1.2%. Broadcom said a group of banks would provide $63 billion in financing.
The money will buy Broadcom chips and networking products. Those products will be leased to Anthropic, the company behind Claude.
Broadcom shares rose 4%. Advanced Micro Devices climbed 5.5%, and Micron Technology gained 2.8%.
Lower oil prices also helped stocks. Prices fell after Iran’s Supreme Leader Mojtaba Khamenei met with security official Mohsen Rezaei to discuss ending the war with the US.
Tech stocks tied to the AI buildout have struggled in recent weeks. Investors have questioned how the technology is financed.
Morgan Stanley strategist Mike Wilson said most of the correction is already over. He spoke on CNBC’s “Closing Bell” on Tuesday.
Fed Decision Due at 2 p.m. ET
The Fed ends its two-day meeting on Wednesday, with a decision at 2 p.m. ET. It is expected to hold rates at 3.75% to 4%.
CME’s FedWatch tool shows about a 92% chance of no change. The Fed raised rates by a quarter point in September.
Some investors expect Fed Chairman Kevin Warsh to signal more hikes ahead. Inflation readings remain elevated.
Microsoft and Alphabet will open Big Tech earnings after the bell. Investors want updates on AI demand and spending plans.
Microsoft’s report follows news that it offered buyouts to up to 60,000 employees. The company is trying to streamline operations during the AI buildout.
Ford, GE Vernova, T-Mobile US, eBay, Chipotle Mexican Grill and ServiceNow also report this week. In Asia, Japan’s Nikkei 225 closed 1.08% higher, and China’s CSI 300 rose 0.85%.
As of 5:25 a.m. EDT, Dow futures traded at 52,479, down 0.19%.
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