NEW YORK (AP) — The U.S. stock market is drifting Wednesday as Wall Street waits to hear from the Federal Reserve in the afternoon about where it sees interest rates going.
The S&P 500 rose 0.1%, coming off a mixed day where falling tech stocks weighed on the index. The Dow Jones Industrial Average was up 221 points, or 0.4%, as of 12:22 p.m. Eastern time, and the Nasdaq composite was 0.2% higher.
Several stocks involved in the artificial-intelligence business headed back up their roller-coaster ride, supporting the market. Jabil rose 3.2% after reporting stronger results for the latest quarter than analysts expected, as CEO Mike Dastoor said that “AI infrastructure demand remains extremely strong.”
Broadcom climbed 5.8%, and Applied Materials rose 7.4%.
Such AI stocks have veered up and down in recent weeks and yanked the rest of the market behind them on worries that their prices shot too high because of the mania around AI.
SpaceX, meanwhile, erased an early gain and dropped 2.3%. It's potentially on track for its first loss since its ballyhooed debut on the U.S. stock market last week.
Outside of tech, La-Z-Boy jumped 18.5% after reporting stronger profit and revenue for the latest quarter than analysts expected. It benefited from revenue made at newly opened stores, though Chief Financial Officer Taylor Luebke said the company continues to have “a measured view” of the broad sales environment.
A report released Wednesday said retailers across the country saw their revenue grow at a faster pace in May than economists expected, offering hope that solid spending by consumers can support the economy. But high inflation has also made U.S. shoppers feel more discouraged about their finances.
The day’s main event will come in the afternoon, when the Fed will announce its latest decision on what to do with interest rates. The widespread expectation is that it will leave its main interest rate alone, as it has throughout this year.
Investors are more interested in the projections that Fed officials will give about where they see interest rates heading in upcoming years and what Kevin Warsh will say after his first meeting as the Fed’s chair.
Traders had been building bets that the Fed may have to raise its federal funds rate this year in order to keep a lid on inflation, which has accelerated because of expensive oil caused by the war with Iran. But oil prices have pulled back to $80 per barrel after the United States and Iran reached a tentative agreement on their war.
Iran is set to immediately take steps to reopen the Strait of Hormuz once the deal is signed, and that would allow oil tankers to exit the Persian Gulf once again and deliver crude to customers worldwide. The hope is that will take pressure off inflation.
As a result, traders are split on where the Fed could take interest rates through the end of the year. Some are betting on a cut to rates, which is something that President Donald Trump has angrily been calling for. But the most popular bet is for no move on rates, while some traders still see a hike as the most likely outcome, according to data from CME Group.
Oil prices ticked higher Wednesday following their sharp slides on optimism about the tentative U.S.-Iran deal to get the global flow of oil going again. The price for a barrel of Brent crude oil rose 0.7% to $79.53. It’s still above its roughly $70 price from before the war, but it’s well below its $100-plus price from a few weeks ago.
In the bond market, Treasury yields held relatively steady. The yield on the 10-year Treasury remained at 4.43%, where it was late Tuesday.
High yields in bond markets worldwide caused by worries about inflation have been threatening to slow economies and undercut prices for all kinds of investments.
In stock markets abroad, indexes were mixed across Europe and Asia.
London’s FTSE 100 was virtually unchanged after a report showed U.K. inflation remained at 2.8% in May.
South Korea’s Kospi jumped 1.6%, and Hong Kong’s Hang Seng fell 0.7% for two of the world’s bigger moves.
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AP Business Writers Chan Ho-him, Matt Ott and Elaine Kurtenbach contributed to this report.
