US stock indices declined on Wednesday as renewed weakness in chipmakers weighed on the market ahead of major tech earnings and the Federal Reserve’s policy decision. The S&P 500 and the Nasdaq slipped, while the Dow dropped more than 400 points, snapping its recent stretch of outperformance.
Microsoft and Meta fell more than 0.5% ahead of their after-hours earnings releases, which are being closely watched as key indicators of AI infrastructure spending. Growing concern that AI-related capital expenditure may be overshooting has recently pressured the “Magnificent Seven” megacaps and sparked a pullback in chip stocks, eroding part of their strong gains from late last quarter. Even so, memory-chip makers held relatively steady, despite downbeat results from SK Hynix.
The Federal Reserve is widely expected to leave interest rates unchanged, though some officials may dissent in favor of a hike amid signs of a more divided FOMC. The Dow also came under additional pressure from a rebound in oil prices following fresh clashes between Iran and the United States, heightening concerns about renewed inflationary pressures. Visa slipped about 1% even after reporting year-on-year revenue growth last quarter.
