U.S. stocks were mixed on Wednesday as Wall Street awaited the Federal Reserve’s highly anticipated policy decision. The Dow Jones Industrial Average rose approx 0.7%, while the S&P 500 dipped 0.1% and the Nasdaq slid more than 0.5%.
The split performance comes as traders overwhelmingly expect the Fed to announce its first interest rate cut of the year later today. While a 25-basis-point move is priced in as a near certainty, investors are looking for guidance on how many more cuts could follow before year-end.
Market Movers:
- Nvidia (NVDA) shares dropped nearly 3% after reports that Chinese regulators instructed major tech companies, including Alibaba, not to buy its RTX Pro 6000D chip. The move effectively blocks tens of thousands of AI chip orders, highlighting escalating U.S.-China tensions in the semiconductor sector.
- General Mills (GIS) posted stronger-than-expected quarterly sales, but shares slipped as the food giant warned of a challenging consumer environment. Investors reacted cautiously, with management noting softer demand trends even as core brands like Cheerios continued to perform well.
- Reddit (RDDT) pared early losses after news broke that the platform is in talks with Google over an expanded AI content-sharing deal. Shares had fallen more than 6% earlier in the day but rebounded to a 3% decline on expectations that new contracts could bolster revenue streams.
- Opendoor Technologies (OPEN) surged nearly 16%, extending a stunning rally that has seen shares climb over 220% in the past month. The gains follow the appointment of Shopify’s former COO as CEO and the company’s first quarter of positive adjusted earnings.
- Hims & Hers (HIMS) extended its decline after the FDA issued a warning letter over allegedly misleading marketing of its compounded semaglutide products. Shares dropped another 3%, compounding losses from earlier this week, though the stock remains more than double its level from the start of the year.
- Lyft (LYFT) soared as much as 30% in premarket trading and remained up 15% midday after announcing a partnership with Waymo to launch self-driving taxis in Nashville by 2026. The deal underscored Lyft’s strategy to carve out an edge in autonomous ride-hailing, while rival Uber slid 4% on the news.
- Workday (WDAY) jumped after activist investor Elliott Investment Management disclosed a $2 billion stake. The firm praised management’s strategy, sparking optimism that Workday could accelerate shareholder returns while fending off mounting competition in enterprise HR software.
Fed Decision Looms Large
The central focus of the day is the Federal Reserve’s September policy announcement, expected at 2:00 p.m. ET. Markets overwhelmingly expect a 25-basis-point cut, the Fed’s first in 2025, as policymakers respond to signs of labor market weakness despite inflation remaining above target.
Attention will turn to the Fed’s updated “dot plot” of interest-rate projections, which will signal whether officials foresee one, two, or even three more cuts by year-end. Chair Jerome Powell’s press conference is expected to provide additional clarity, particularly around the balance between inflation risks and labor market deterioration. The decision arrives amid growing political pressure on the Fed. President Trump has criticized Powell in recent weeks, but secured Senate confirmation of his nominee, Stephen Miran, who will cast a vote today. Meanwhile, Fed Governor Lisa Cook remains in her seat after a court blocked Trump’s attempt to remove her, highlighting heightened tensions around central bank independence.
Corporate and Global Developments
Beyond monetary policy, corporate headlines added to volatility. Tech remained under the watch after China moved to block purchases of Nvidia’s custom AI chips, a reminder of the geopolitical risk facing U.S. semiconductor companies. Other AI-linked stocks, including Broadcom, Palantir, and Oracle, also saw declines. Meanwhile, consumer-focused companies delivered mixed signals. General Mills highlighted resilience in staple food categories but warned of headwinds in consumer spending. Cracker Barrel remained in focus following backlash to its now-abandoned rebrand effort.
In tech, Oracle’s rally cooled after its recent surge tied to cloud growth and its potential role in a TikTok deal. The stock slipped more than 2%, a reminder of concerns about valuation and dependence on high-profile partnerships.
Looking Ahead
The Fed’s rate decision later today will set the tone for markets through the rest of the week. Investors will be watching not only the size of the cut but also Powell’s language and the dot plot, which together could chart the path for monetary policy into 2026. At the same time, geopolitical and trade risks remain elevated. China’s AI chip restrictions and ongoing negotiations around TikTok illustrate how quickly headlines can reshape investor sentiment. The trajectory for semiconductors, cloud software, and consumer-facing platforms could hinge on decisions made in Washington and Beijing as much as on corporate fundamentals.
With major indexes still near record highs, Wall Street faces a delicate balance. A supportive Fed could extend the rally, but heightened political scrutiny and global tensions could amplify volatility. The next 48 hours may determine whether U.S. equities hold their momentum into the final quarter of the year or face a steep repricing of expectations.
