By Joy Wiltermuth and Mark DeCambre
U.S. stock indexes had a mixed finish Wednesday, after the Federal Reserve said it would keep interest rates steady near zero and retain its full range of tools to support the economic recovery during the pandemic.
Investors also were focused on results streaming in from the busiest week of corporate earnings reports for the second quarter.
How did stock benchmarks end trade?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.47% shed 127.59 points, or 0.4%, to close at 34,930.93, after swinging in and out of positive territory.
The S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.59% edged almost a point lower, ending at 4,400.64.
Nasdaq Composite /zigman2/quotes/210598365/realtime COMP +0.56% rose 102.01 points, or 0.7%, finishing at 14,762.58.
The Russell 2000 Index /zigman2/quotes/210598147/delayed RUT +0.08% of small-cap stocks, rose 1.5%.
On Tuesday , the Dow fell 85.79 points, or 0.2%, to 35,058.52. The The S&P 500 declined 20.84 points, or 0.5%, to 4,401.46 to snap a five-session winning run. The tech-heavy Nasdaq dropped 180.14 points, or 1.2%, to 14,660.58, its largest one day fall since May 12.
What drove the market?
Stocks mostly got a boost after the Federal Reserve opted not to tighten monetary policy following a two-day meeting, reiterating that the path of recovery will depend on the virus.
Fed Chairman Jerome Powell stressed that vaccinations have been a major aid in the U.S. economic recovery, in an afternoon press briefing, but cautioned that their slowing pace and the delta variant of the coronavirus also remain risks.
Investors were hoping for clarity on when the central bank will begin tapering its $120 billion monthly bond purchases but Powell said the topic continues to be studied by the central bank and reiterated that any future decisions will remain data dependent. “I would want to see some strong job numbers,” Powell said.
“I think it’s one more small step forward in their patient and methodical path” toward eventually scaling back monthly bond purchases, said Jason England, global bonds portfolio manager at Janus Henderson Investors, in an interview with MarketWatch. “Obviously, they’ve made progress on the inflation front, but not as much on jobs.”
Powell stressed again that he expects inflation to eventually pull back closer to the Fed’s 2% annual target.
Beyond the Fed update, investors remained bullish on the strength of second-quarter earnings reported thus far, with the earnings growth rate in the April through the end of June up nearly 80%, led by a 168% rate for the financial sector, according to data compiled by S&P Global Market Intelligence.
Robinhood Markets, Inc., a popular online brokerage with individuals, is expected to price its initial public offering on Wednesday and to begin trading under the “HOOD” ticker on Thursday.
Ahead of the Robinhood IPO, the company said regulators are investigating whether its employees traded popular meme stocks GameStop Corp GME and AMC Entertainment Holdings, Inc. AMC before the platform publicly announced trading restrictions in those names on Jan. 28.