The S&P 500 was slightly lower on Wednesday after the Federal Reserve said the economy continued to made progress toward its goals, but more substantial improvement is needed for it to start dialing back its easy-money policies.
The broad equity benchmark erased earlier losses and inched up 0.1%. The tech-heavy Nasdaq Composite climbed 0.6%. The Dow Jones Industrial Average dipped 90 points. The major averages pulled back from their records in the previous session, snapping a five-day winning streak.
The Federal Open Market Committee kept interest rates in a target range near zero, reiterating its view that the economy continues to “strengthen” despite the spread of the delta coronavirus strain.
“The sectors most adversely affected by the pandemic have shown improvement but have not fully recovered” the post-meeting statement said. “Inflation has risen, largely reflecting transitory factors. Overall financial conditions remain accommodative, in part reflecting policy measures to support the economy and the flow of credit to U.S. households and businesses.”
The central bank started purchasing at least $120 billion a month in bonds in December, with at least $80 billion going to Treasurys and another $40 billion floor on mortgage-backed securities.
“Since then, the economy has made progress toward these goals, and the Committee will continue to assess progress in coming meetings,” the statement said.
Investors are eager to hear from Chairman Jerome Powell on the central bank’s plans to start trimming its bond purchases, the first major step in tightening policy. Powell will speak to the press at 2:30 p.m. ET.
Boeing shares climbed about 5% after the manufacturer posted its first profit since the third quarter of 2019 thanks to a rebound in aircraft deliveries. Pfizer shares rose about 2% after the company reported stronger-than-expected earnings and raised its 2021 sales forecast for the Covid vaccine.
Investors also digested a host of quarterly results from megacap tech names. Google-parent Alphabet popped more than 4% after the tech giant posted quarterly results, registering a 69% jump in advertising revenue.
Apple shares dipped 0.4% after CEO Tim Cook warned that silicon “supply constraints” will affect sales the iPhone as well as the iPad. The company did beat top- and bottom-line estimates and said iPhone sales surged 50% year over year.
Microsoft saw its shares rise 1% after reporting an earnings beat despite a dip in revenue from its Windows division.
The busiest week of earnings continues on Wednesday with Qualcomm, Facebook, Ford and PayPal among the names on deck. Of the S&P 500 companies that have reported quarterly results thus far, 89% have topped earnings estimates, while 86% have exceeded revenue expectations, according to data from Refinitiv.
The major averages are still on track to end the month higher. The S&P is up 2.4% for July, while the Nasdaq Composite and Dow have gained 1.1% and 1.6%, respectively.
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The Federal Reserve will conclude its two-day meeting on monetary policy Wednesday.