The Dow Jones were little changed Wednesday, while the S&P 500 and Nasdaq fell slightly, as investors await the Federal Reserve meeting decision. Meanwhile, Microsoft, Google parent Alphabet and Boeing were big earnings movers.
Meta Platforms reports after the close, along with ServiceNow, Chipotle Mexican Grill, United Rentals and Lam Research.
The stock market rally advanced Tuesday, with the S&P 500 hitting a fresh 15-month high and Dow Jones extending its win streak to 12 sessions. The Nasdaq is approaching its rally highs.
MSFT stock fell early Wednesday after the Dow Jones tech giant said it expects higher spending on artificial intelligence and "gradual" AI revenue growth. Google stock jumped, breaking out of a base. The Internet giant beat on strong cloud growth and YouTube ads, with management expressing continued confidence in melding AI and search ads. Meta stock rose on Google's results and comments.
Visa stock fell 1% after the Dow payments leader narrowly beat quarterly views. Visa is still in buy range.
Boeing stock rose more than 5%, breaking out of a base as the Dow aerospace giant reported a smaller-than-expected second-quarter loss, revenue rose solidly and free cash flow easily beat. Boeing also is ramping up 737 Max production. BA stock moved above a flat-base buy point of 223.91.
Dow giant Coca-Cola, Rio Tinto, Stellantis, Hilton Worldwide and New Oriental Education were among the dozens of companies reporting before the open. Stellantis and EDU were modest stock winners, while Rio Tinto and Hilton fell. KO stock was little changed.
China OKs Chip Merger
China finally approved the MaxLinear takeover of Silicon Motion, maker of memory chip controllers. MXL stock plunged 20%. SIMO stock skyrocketed 75%. The SIMO takeover approval raised regulatory hopes for the Intel deal to buy Tower Semiconductor. TSEM stock leapt 8%. Intel stock was steady.
META stock is on IBD Leaderboard, with CMG stock on the Leaderboard watchlist. Microsoft stock is on the IBD Long-Term Leaders list. ServiceNow and URI stock are on the IBD 50. NOW stock is on the IBD Big Cap 20.
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Fed Meeting
The Fed meeting concludes Wednesday with a policy announcement due at 2 p.m. ET. Markets have priced in a quarter-point Fed rate hike, but see only a modest chance of yet another increase in 2023.
Fed chief Jerome Powell will speak at 2:30 p.m. ET. How hard will he push the case for an additional rate hike?
Dow Jones Today
The Dow Jones just edged lower while the S&P 500 lost 0.2%. The Nasdaq fell 0.1%. Microsoft, Boeing, Coca-Cola and Visa stock are Dow Jones components. Boeing, Visa, Coca-Cola, Microsoft, and Google stock are all S&P 500 members, with the latter two Nasdaq titans.
The 10-year Treasury yield edged down to 3.88%.
Crude oil futures edged lower. Copper prices slipped after big gains in the past few days.
Join IBD experts as they analyze actionable stocks in the stock market rally on IBD Live
Stock Market Rally
The Dow Jones Industrial Average edged up 0.1% in Tuesday's stock market trading. The S&P 500 index climbed 0.3%. The Nasdaq composite rose 0.6%. The small-cap Russell 2000 finished fractionally higher.
U.S. crude oil prices rose 1.1% to $79.63 a barrel, a fresh three-month high.
The 10-year Treasury yield popped nearly 6 basis points to 3.91%.
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Microsoft Stock
MSFT stock slumped almost 4%.
Microsoft earnings topped fiscal fourth-quarter forecasts, with revenue up 8% to $56.19 billion. Azure cloud-computing growth rose 26% vs a year earlier, edging past views though below the prior quarter's 27% advance.
Microsoft said Intelligent Cloud revenue, which includes Azure, will see a slight sequential fall in the fiscal first quarter of 2024. The Dow Jones tech titan said AI revenue growth will be "gradual."
The Dow tech giant also said it expects "increased capital spending on AI initiatives," with capital expenditures rising in each quarter of fiscal 2024.
That's likely good news for Nvidia and other AI-related suppliers, at least in the short run. But
But it could be bad news for companies trying to keep up in the AI arms race, such as Amazon.com and various software makers. Amazon dipped and a number of software stocks fell solidly.
Google Stock
Google earnings climbed 17%, ending a four-quarter string of declines. Revenue was up 7%. Google said cloud computing revenue rose 28% to $8.03 billion.
On the earnings call, Google remained bullish about incorporating AI features with advertising.
Google stock leapt nearly 7% to above 130 early Wednesday, breaking out. GOOGL stock has a 127.10 buy point from a cup-with-handle base. Meanwhile, Meta stock climbed more than 1% on Google's results and comments.
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