US stocks extended most of their losses on Wednesday amid renewed weakness in chipmakers ahead of key tech earnings, while the Federal Reserve left interest rates unchanged. The S&P 500 and Nasdaq closed slightly lower, and the Dow at one point dropped nearly 700 points. Microsoft and Meta traded mostly flat ahead of their post-market earnings releases, which are being closely watched for fresh signals on AI infrastructure spending. Mounting concern that AI-related capital expenditures may be overextended has recently weighed on the “Magnificent 7” and sparked a pullback in semiconductor names, erasing part of their late–last-quarter rally. Micron, Applied Materials, and SanDisk fell between 2% and 5% following downbeat results from SK Hynix.
At the policy level, the Fed kept rates on hold in what analysts described as its least predictable meeting in 15 years, with three officials dissenting in favor of a hike. The Dow also came under pressure from a renewed spike in oil prices after fresh clashes between Iran and the US, stoking concerns about additional inflationary pressures. On the corporate front, Visa reversed earlier weakness to gain about 1% after reporting revenue growth last quarter.
