The three major stock indexes on Wall Street ended mixed. With tech and chip stocks gaining ahead of earnings from major big tech, the Standard & Poor's (S&P) 500 index topped 7,000 for the first time ever, but it gave back gains as investors digested the burden of record highs and the Federal Open Market Committee (FOMC) outcome.
On the 28th (Eastern time), at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average finished 12.19 points, or 0.02%, higher at 49,015.60. The S&P 500 fell 0.57 point, or 0.01%, to 6,978.03, while the Nasdaq composite rose 40.35 points, or 0.17%, to 23,857.45 at the close.
The S&P 500 climbed as high as 7,002.28 intraday, reaching the 7,000 mark for the first time. It has been about one year and two months since it first broke above 6,000 in Nov. 2024. The Dow also set a record high of 49,633.35 earlier this month, putting the 50,000 mark within sight.
Strong expectations for artificial intelligence (AI) and chip stocks led the market. The Philadelphia Semiconductor Index, centered on AI and chip stocks, also jumped more than 2% on the day. Solid earnings at major semiconductor corporations buoyed investor sentiment.
Seagate Technology surged more than 19% after posting results that beat market expectations, and Micron Technology rose 6.10% as the memory shortage persisted. Intel jumped 11% on speculation that Nvidia and Apple could allocate orders to reduce reliance on TSMC.
Manager Jerre Ellerbrock of Argent Capital Management said, "Currently, demand far exceeds supply across the semiconductor industry."
At the two-day regular FOMC meeting, the benchmark interest rate was left unchanged as expected. The Federal Reserve (Fed) decided to keep the target range for the federal funds rate at 3.50% to 3.75%. After three consecutive 25-basis-point cuts from September to December last year, the Fed is taking a breather.
In this FOMC statement, assessments of the U.S. economy and employment turned somewhat more optimistic. The description of economic activity was upgraded from "moderate" to "solid," and references to downside risks to employment were removed. The Fed judged that the unemployment rate is showing signs of stabilizing.
Fed Chair Jerome Powell also avoided remarks that could roil markets at the press conference. He said, "It is nobody's baseline expectation that the Fed's next move will be a rate hike," offering reassurance to the market.
Ellerbrock said, "The Fed is maintaining an overall neutral stance," adding, "It appears willing to wait until it needs to set direction based on changes in the data."
After the close, Microsoft (MS), Tesla, and Meta reported results for the fourth quarter of last year. MS and Meta beat market expectations on both revenue and earnings per share (EPS). However, MS shares plunged in after-hours trading before trimming losses, and Meta turned higher after volatility. Tesla's EPS topped estimates, and its shares rose even though revenue declined year over year for the first time ever.
By sector, most groups fell except for energy, materials, communication services and technology.
According to the Chicago Mercantile Exchange (CME) FedWatch Tool, the federal funds futures market priced an 88.6% chance of a rate hold in March. The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) was unchanged from the previous session at 16.35.