US stock indexes advanced on Wednesday after the US Federal Reserve left its key policy rate unchanged, as widely expected, shifting the probability of a rate hike to its next monetary policy meeting in December.
In its accompanying statement, the Fed upgraded its assessment of the economy while acknowledging inflation "remains elevated." At the press conference following the release, Fed Chair Kevin Warsh said the central bank has made clear its willingness and readiness to act.
"The Fed didn't throw any curveballs," said Ryan Detrick, chief market strategist at Carson Group in Omaha. "It was widely expected they'd hold, so no big surprise there."
"Market participants are getting more used to (Warsh's) style," Detrick added.
Financial markets are pricing in an 87.4% likelihood of a 25-basis-point rate hike at the Fed's December meeting, up from 78.3% on Tuesday, according to CME's FedWatch tool.
Rate hike forecasts could be swayed by data expected on Thursday, including the Commerce Department's Personal Consumption Expenditures report — which includes the central bank's preferred inflation gauge — and an advance take on third-quarter GDP.
Third-quarter earnings season is in full swing, with 200 companies in the S&P 500 having posted results. Of those, 84% have beaten consensus estimates, according to the most recent LSEG data.
Analysts estimate aggregate third-quarter S&P 500 earnings growth of 31.8% year-on-year, up from 30.6% as of October 1, per LSEG.
Memory chipmaker Micron Technology MU.O jumped after South Korean rival SK Hynix 000660.KS reported a more than sevenfold jump in quarterly profit. SK Hynix's US-listed shares SKHY.O closed sharply higher.
The Philadelphia SE Semiconductor index .SOX outperformed the broader market, notching its fourth consecutive daily gain and bouncing back from its recent selloff, which was fueled by worries regarding hyperscalers' massive investment in AI.
"I think the market realizes what the Fed did today is one thing, but are AI expenditures continuing?" Detrick said. "That's what the market's focused on."
Microsoft MSFT.O and Alphabet GOOGL.O are scheduled to report quarterly results after markets close.
According to preliminary data, the S&P 500 .SPX gained 25.43 points, or 0.33%, to end at 7,748.03 points, while the Nasdaq Composite .IXIC gained 83.42 points, or 0.32%, to 26,561.24. The Dow Jones Industrial Average .DJI rose 126.21 points, or 0.24%, to 52,503.78.
US crude pricesCLc1 climbed after Iran-backed Houthis attacked a refinery in Saudi Arabia, adding to supply worries. Since the Iran war began, oil prices have soared to over $100 per barrel, pushing up costs in other areas of the economy and driving inflation higher.
RobinhoodHOOD.O dipped after softness in cryptocurrencies dragged the trading platform's third-quarter profit below analyst expectations.
VertivVRT.N surged after the digital infrastructure firm topped quarterly expectations and raised its full-year profit and revenue forecasts.
Boston ScientificBSX.N dropped after the medical device maker trimmed its annual profit forecast.
Reuters
