Wall Street Balances Chip Gains Against Megacap Weakness

US stocks traded unevenly on Wednesday as gains in semiconductor shares were offset by declines in several large technology companies ahead of the Federal Reserve’s interest rate decision and major corporate earnings.

At 11:39 a.m. Eastern Time, the Dow Jones Industrial Average had gained 155.89 points, or 0.30%, to 52,533.46. The S&P 500 rose 16.89 points, or 0.22%, to 7,739.58, while the Nasdaq Composite added 4.35 points, or 0.02%, to 26,482.16.

Six of the S&P 500’s 11 major sectors advanced, with energy leading gains as crude oil prices increased.

Semiconductor shares provided support for the broader market. Micron Technology climbed 4.8% to its highest level in more than two weeks after South Korea’s SK Hynix reported a more than sevenfold jump in quarterly profit, driven by demand for AI infrastructure. SK Hynix’s US-listed shares rose 12.2%, while the Philadelphia Semiconductor Index gained 0.9%, putting it on track for a fourth consecutive session of gains.

Megacap Declines Limit Market Advances

Weakness among major technology and growth stocks restrained the broader rally. Tesla shares fell 1.3% after rising more than 9% over the previous two sessions, while Apple declined 0.5% and SpaceX dropped 2.4%.

The Nasdaq had gained approximately 2% during the week, recovering some ground following a difficult first half of October. Sentiment toward AI improved after Anthropic disclosed its US IPO filing, although concerns about the industry’s financing requirements remained.

Alphabet shares rose 1% following a media report that OpenAI planned to purchase Google’s AI chips, highlighting the growing commercial importance of semiconductor supply within the AI ecosystem.

Elsewhere, digital infrastructure provider Vertiv jumped 13.2% after raising its full-year revenue and profit forecasts and reporting third-quarter results above expectations. Medical device maker Boston Scientific fell 6.6% after lowering its annual profit forecast.

AI Spending and Financing Under Scrutiny

Investors were preparing to assess quarterly results from Microsoft and Alphabet, scheduled for release after the market close. Both companies were expected to report accelerating cloud growth.

However, strong revenue figures may not be sufficient to sustain investor confidence if capital expenditure continues rising without a clear improvement in financial returns.

Concerns have shifted toward how AI infrastructure expansion is financed, particularly as borrowing costs rise and technology companies increasingly turn to debt and equity markets. Investors are examining whether demand for cloud computing and AI services can support the industry’s substantial investment commitments.

LSEG data showed that third-quarter earnings growth for S&P 500 companies was expected to reach 31.8%, up from the 31% estimate recorded the previous week.

Federal Reserve Decision Shapes Rate Expectations

The Federal Reserve was scheduled to announce its policy decision at 2 p.m. Eastern Time on Wednesday. Markets widely expected policymakers to hold rates steady following September’s increase, leaving investors focused on Chair Kevin Warsh’s comments and the outlook for future monetary tightening.

Despite expectations for a near-term pause, futures markets reflected a hawkish outlook, with traders anticipating at least three quarter-percentage-point increases by late 2027, according to LSEG data.

Persistent inflation, partly linked to higher energy costs associated with the Middle East conflict, has strengthened expectations that borrowing costs could remain elevated.

Investors were also awaiting September’s Personal Consumption Expenditures inflation report, due Thursday, and third-quarter GDP data expected to show annualized growth of 3.2%.

What Investors Should Watch Next

The Federal Reserve’s guidance and earnings from Microsoft and Alphabet will be central to determining whether the market can extend its recovery. Investors will assess cloud growth, capital expenditure plans and evidence that AI investment can generate sustainable returns.

Inflation data and GDP figures will also influence interest rate expectations. Meanwhile, continued semiconductor strength could support technology shares, although financing concerns and uneven performance among major companies may limit broader market gains.