FX.co ★ US Stocks Waver on Wednesday

US stock indices declined on Wednesday as renewed weakness in chipmakers weighed on the market ahead of major tech earnings and the Federal Reserve’s policy decision. The S&P 500 and the Nasdaq slipped, while the Dow dropped more than 400 points, snapping its recent stretch of outperformance.

Microsoft and Meta fell more than 0.5% ahead of their after-hours earnings releases, which are being closely watched as key indicators of AI infrastructure spending. Growing concern that AI-related capital expenditure may be overshooting has recently pressured the “Magnificent Seven” megacaps and sparked a pullback in chip stocks, eroding part of their strong gains from late last quarter. Even so, memory-chip makers held relatively steady, despite downbeat results from SK Hynix.

The Federal Reserve is widely expected to leave interest rates unchanged, though some officials may dissent in favor of a hike amid signs of a more divided FOMC. The Dow also came under additional pressure from a rebound in oil prices following fresh clashes between Iran and the United States, heightening concerns about renewed inflationary pressures. Visa slipped about 1% even after reporting year-on-year revenue growth last quarter.