Markets brace for Fed decision and big tech earnings

Wednesday brings a Fed decision for markets, and the morning started with a split screen. The S&P 500 rose 0.2% at the open, the Dow Jones added 0.1%, and the Nasdaq climbed 0.4%, according to USA TODAY live coverage. The moves were modest, and that restraint made sense. Investors were waiting for two events that land later in the day: the central bank announcement in the afternoon and earnings from two of the largest technology companies after the closing bell.

The backdrop helped explain the calm. Stocks had already risen for two straight sessions, helped by a rally in chip shares after strong results from SK Hynix and by the public filing of Anthropic IPO documents, according to Investopedia. Oil prices moved higher in early trading while gold eased slightly, and bitcoin traded above its overnight low. None of that settled the main question for the day, which was what the Federal Reserve would signal about borrowing costs for the rest of the year after the Fed decision.

What the Fed is expected to do

The Federal Open Market Committee is scheduled to announce its Fed decision at 2 p.m. Eastern, with Chair Kevin Warsh speaking at a news conference half an hour later. Forecasters widely expect officials to leave the benchmark rate unchanged at a range of 3.75% to 4%, after raising it last month for the first time in three years. Inflation remains the reason for caution. The consumer price index rose 3.7% over the year in September, above the central bank target, while wage growth ran at 3% over the same period, according to USA TODAY. A pause would give officials more time to judge the effect of the last increase and to watch whether fighting in the Middle East keeps pushing prices higher.

Traders are pricing in a strong chance of a hold, with roughly nine in ten expecting no change, according to CME Group data cited by USA TODAY. Attention then shifts to December, where traders put the chance of an increase at 86%, according to Investopedia. A survey of economists reported by Reuters found a similar split, with nearly all expecting a pause this month and a December increase to follow. Warsh wording will matter as much as the Fed decision itself. A firm tone could push borrowing costs higher, while a softer tone that notes risks to growth could help rates stay near current levels.

Alphabet and Microsoft report after the bell

The Fed decision arrives first in the afternoon, and the earnings reports follow after the bell. After the closing bell, Alphabet and Microsoft headline the earnings calendar. Both companies are expected to report another quarter of solid revenue and profit growth, according to Investopedia, but investors will focus on one area above the rest: cloud revenue. Google Cloud and Azure need to keep growing at a solid pace to show that demand for artificial intelligence is strong enough to support heavy spending on data centers and chips. Amazon, which also runs a large cloud business, reports on Thursday. ServiceNow, T-Mobile, FedEx, Ford and Chipotle are also due to report later in the day.

Earnings already moving shares

Seagate gave an early read on how hard it has become to impress investors. The hard drive maker reported adjusted earnings of $7.68 per share on revenue of $4.23 billion for its fiscal first quarter, according to Investopedia, beating analyst estimates of $7.42 per share on $4.14 billion in revenue. Its forecast for the current quarter also came in ahead of projections. Shares still slipped 2.5% in premarket trading, a sign that expectations were already high after the stock had risen almost 150% through the Tuesday close.

Robinhood told a similar story with a different twist. The trading platform said customers opening agentic trading accounts more than doubled in the third quarter to about 200,000, driving over $1.6 billion in trading volume, according to Investopedia. Revenue rose 12% from a year earlier to $1.42 billion, in line with estimates, as growth in event contracts helped offset a drop in crypto revenue. Adjusted earnings of $0.60 per share missed estimates as expenses climbed, and shares fell 6% ahead of the open.

What young investors should watch

Once the Fed decision is out, the focus shifts to the earnings reaction. For younger investors, the day offers a practical lesson in how headlines turn into portfolio moves. A Fed decision changes the cost of borrowing and the return on savings, and it can move stocks in minutes when the statement or the press conference surprises traders. Earnings from Alphabet and Microsoft will test whether cloud growth can keep pace with spending, and the reaction after the bell will set the tone for Amazon results the next day. The useful move is to watch the statement language, then the cloud numbers and the guidance that follows, rather than reacting to the first headline.

Full coverage of the Fed decision: Investopedia market briefing and USA TODAY live updates.