Stock Market Update

[BRIEFING.COM] The stock market had a mixed showing. Major indices were in a holding pattern in the early going as investors waited for the FOMC policy decision at 2:00 ET and Fed Chair Powell's press conference at 2:30 ET.

The committee voted unanimously to maintain the target range for the fed funds rate at 4.25-4.50%, which was largely expected. Market participants were hoping for more clarity about the Fed's path regarding rate cuts at Fed Chair Powell's press conference, but he maintained that policy is in a good place to allow the Fed to wait for more data. 

The major equity indices had a volatile response, ultimately closing higher for the day. The Dow Jones Industrial Average rose 0.7%, the S&P 500 closed 0.4% higher than yesterday, and the Nasdaq Composite registered a 0.3% gain. 

Equity indices held up well considering the disappointing price action in Alphabet (GOOG 152.80, -12.40, -7.5%) and Apple (AAPL 196.25, -2.26, -1.1%) after a Bloomberg report that Apple may shift toward using an AI search feature, which would reduce the reach of Alphabet's Google.

Many other stocks participated in upside moves. Advancers led decliners by a 3-to-2 margin at the NYSE and by an 11-to-10 margin at the Nasdaq. 

The upside bias was driven in part by news of policy easing by the People's Bank of China, along with optimism about the trade war following news that representatives from the U.S. and China will meet to begin trade talks in Switzerland on May 8.

Some of the optimism around this development was tempered, however, after President Trump said that he is not open to pulling back the 145% tariff on imports from China as part of negotiations.

Late afternoon reports also indicated that the Trump administration is considering rescinding the AI chip export restrictions. This news sparked increased buying in the chipmaker space, leading the PHLX Semiconductor Index (SOX) to close 1.7% higher.

The price action in chipmakers helped boost the S&P 500 technology sector to a 0.9% gain despite the decline in Apple. The consumer discretionary (+1.0%) and health care (+0.8%) sectors were also top performers. The communication services sector was the worst performer by a wide margin due to the fallout in Alphabet. 

• Dow Jones Industrial Average: -3.4% YTD
• S&P 500: -4.3% YTD
• S&P Midcap 400: -6.7% YTD
• Nasdaq Composite: -8.1% YTD
• Russell 2000: -10.8% YTD

Reviewing today's economic data:

• Weekly MBA Mortgage Applications Index 11.0%; Prior -4.2%

Thursday's economic calendar features:

• 8:30 ET: Preliminary Q1 Productivity (Briefing.com consensus -0.4%; prior 1.5%), preliminary Q1 Unit Labor Costs (Briefing.com consensus 4.0%; prior 2.2%), weekly Initial Claims (Briefing.com consensus 238,000; prior 241,000), and Continuing Claims (prior 1.916 mln)
• 10:00 ET: March Wholesale Inventories (Briefing.com consensus 0.5%; prior 0.3%)
• 10:30 ET: Weekly natural gas inventories (prior +107 bcf)