Stocks were mostly mixed on Wednesday morning as traders braced themselves for the Federal Reserve’s interest rate decision later in the day. Investors also awaited the next round of earnings reports in order to measure the health of the global economy.
The Nasdaq Composite Index, S&P 500, and Dow Jones Industrial Average all remained relatively unchanged, while in Europe, the Stoxx Europe 600 edged lower by 0.2%. The MSCI Asia Pacific Index was also little changed, while the MSCI Emerging Markets Index declined by 0.2%.
Markets are expecting the Federal Reserve to hike interest rates on Wednesday following June’s pause in monetary policy tightening. Strong consumer data suggests that further policy tightening may be needed to reduce inflation.
In terms of corporate earnings, Google’s parent company Alphabet rose 7% during late trading on Tuesday after reporting second-quarter earnings that beat expectations. Microsoft, in contrast, fell after reporting underwhelming sales growth.
“We are going to see some deceleration in corporate earnings, deceleration in economic growth, softening of demand, all of this will have a higher impact on equities,” Aarthi Chandrasekaran, director of investments at Shuaa Asset Management claimed. “The US economy is weakening but it’s not weakening enough to price in a full rate cut next year.”