Nasdaq Composite: Nvidia, Alphabet Drag Index Lower Ahead of Fed Rate Decision

Dow Climbs Mid-Session While Nasdaq Slips Ahead of Fed Decision at 18:00 GMT

Stocks were mixed mid-session Wednesday, with the Dow up 300 points while the Nasdaq dropped 0.5%, as traders awaited the Federal Reserve’s rate decision and updated economic projections due at 18:00 GMT. While a 25 basis point cut is widely expected, market participants are focused on the central bank’s rate outlook and Chair Jerome Powell’s post-meeting comments.

Will the Federal Reserve Signal More Cuts Ahead?

Fed funds futures reflect a 96% probability of a 25 basis point cut, bringing the target range to 4.00%-4.25%. Traders are closely watching the updated “dot plot” and Powell’s remarks for indications of whether further cuts are on the table in October or December.

Splits within the committee are becoming more pronounced, with new Governor Stephen Miran and other Trump-aligned officials potentially dissenting either for a deeper cut or none at all.

Goldman Sachs expects Powell to acknowledge slowing labor market data but stop short of committing to sequential cuts. Analysts broadly anticipate two rate reductions by year-end. Any divergence from that expectation could spark repricing in equity and bond markets.

Tech Stocks Pressure Nasdaq as Nvidia Slides

The Nasdaq lagged major indexes at mid-session, dragged down by high-profile tech names. Nvidia fell 3% following a report that China banned large domestic firms from purchasing its AI chips. AMD dropped 1.4% in sympathy. Alphabet and Amazon each lost over 1%, while Palantir slid more than 3%.

Meanwhile, Workday surged 8% after activist investor Elliott Management disclosed a $2 billion stake. Adobe, Marvell Technology, and Applied Materials all traded higher, offering some support to the broader tech space.

Consumer Staples and Financials Outperform; Tech Lags

Consumer staples led sector gains, rising 0.96% as Walmart climbed 2% on optimism tied to its AI initiatives. Financials added 0.72%, while healthcare and real estate also advanced. Technology was the weakest group, down nearly 1%. Consumer discretionary and industrials were slightly negative.

Energy traded higher by 0.27% as oil prices held firm, while utilities and materials posted modest gains.

What’s the Market Outlook After the Fed Speaks?

With the Fed decision approaching, traders are focused on Powell’s tone. A dovish lean could support rate-sensitive sectors like tech and real estate, while a more cautious stance might reinforce the recent bid in defensive names. The updated dot plot and economic forecasts will set the tone for rate expectations into Q4.

Post-announcement, traders will monitor jobless claims, PMI data, and inflation reports to gauge the Fed’s next move. Any deviation from the expected pace of cuts could quickly reshape risk sentiment.

More Information in our Economic Calendar.