S&P 500 remains little changed after Fed keeps rates near zero

U.S. stocks remained flat on Wednesday after the Federal Reserved left interest rates unchanged in its latest policy decision.

The S&P 500 hovered above the flatline, but touched a new intraday record earlier in the session. The Dow Jones Industrial Average shed about 150 points, dragged down by a 7% drop in Amgen’s stock on disappointing earnings. The Nasdaq Composite traded lower by 0.1%.

The Federal Reserve wrapped up its two-day policy meeting on Wednesday, where the central bank left rates near zero. The Fed upgraded its assessment of the economy and acknowledged inflation was rising.

“Amid progress on vaccinations and strong policy support, indicators of economic activity and employment have strengthened,” the Fed said in a statement.

“With inflation running persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2 percent for some time so that inflation averages 2 percent over time and longer‑term inflation expectations remain well anchored at 2 percent. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved,” the committee added.

The S&P 500 traded higher after Fed Chairman Jerome Powell said at a press conference that it would likely take “some time” before the Fed’s objectives are achieved.

Boeing lost nearly 3% after posting its sixth straight quarterly loss, which also weighed on the Dow.

Google parent Alphabet reported better-than-expected earnings after the bell on Tuesday, sending shares of the tech giant up more than 4%. Alphabet saw its revenues grow 34% from a year ago.

Meanwhile, Microsoft shares dipped about 2.5% even after the company topped analyst estimates. Microsoft had its largest revenue growth since 2018, thanks in part to gains in PC sales resulting from coronavirus-driven shortages last year.

Shares of AMD and Visa were higher after posting better-than-expected results.

Technology darlings Apple and Facebook both report earnings on Wednesday after the bell.

“Many FAANGs are reporting this week and the stock market may wait until some of these key reports are out before deciding on its next major direction,” said Jim Paulsen, chief investment strategist at the Leuthold Group.

On Tuesday, the major averages traded around the flatline. The Dow Jones Industrial Average rose just 3 points. The S&P 500 closed flat after notching an all-time high on Monday. The Nasdaq Composite was the relative underperformer, dipping 0.34% as Tesla fell 4.5%.

Elsewhere, President Joe Biden is set to unveil later on Wednesday a $1.8 trillion plan in new spending and tax credits geared toward helping families. The Biden administration’s new spending plan would hike the top income tax rate to 39.6% for the wealthiest Americans and raise taxes on capital gains to 39.6% for households making more than $1 million, according to senior administration officials. Stocks took a hit initially last week when reports of this tax hike began to surface.