US stocks closed mixed on Wednesday, giving up earlier gains after Federal Reserve Chair Jerome Powell dampened expectations for near-term rate cuts. The S&P 500 slipped 0.12% to 6,362.90, the Dow Jones fell 171 points to 44,461.28, while the Nasdaq eked out a 0.15% gain to 21,129.67.
Markets had opened higher, buoyed by a stronger-than-expected GDP print, but reversed course as Powell flagged caution in the face of higher tariffs. He said the central bank had “made no decisions” on rate changes and emphasised the need to avoid a one-off price jump turning into entrenched inflation.
The Fed left rates unchanged, but the decision wasn’t unanimous. Two governors dissented in favour of a cut. Treasury yields rose, with traders recalibrating expectations for September and beyond.
Tech giants lead earnings after hours
Despite the day’s losses, after-hours action turned sharply positive, thanks to blockbuster earnings from Meta and Microsoft.
Meta jumped over 10% after second-quarter revenue rose 22% to US$47.52bn, with net income up 36%. CEO Mark Zuckerberg credited ad system gains to AI improvements and said Meta was investing in “personal superintelligence,” announcing a US$14.3bn stake in Scale AI. However, its Reality Labs division posted a US$4.53bn loss.
Microsoft soared 8% post-close, pushing its valuation beyond US$4.1tn. Annual Azure cloud revenue surged 34% to more than US$75bn, helping the company post its fastest growth in over three years. Microsoft now joins Nvidia in the exclusive US$4tn club, while Apple lags behind at US$3.2tn.
ASX set to open lower
Australian shares are poised to follow Wall Street lower. The SPI 200 futures point to a 21-point drop at the open, with investors digesting the Fed’s hawkish tone and recalibrating global rate expectations.
The Australian dollar fell 1.1% to US64.37¢, while Brent crude rose 1.3% to US$73.47. Gold fell 1.6% and iron ore slipped 0.6%.
Locally, Beach Energy, Liontown Resources and Origin Energy report today. At 11.30am, key Australian data drops, including retail sales, building approvals, and import/export prices.
Overseas, Japan, China and the US are all due to release major economic data, with markets watching closely for inflation signals and policy shifts.
