U.S. stock indices closed mixed on Wednesday as the Federal Reserve maintained its benchmark interest rate within the 3.50%-3.75% range, marking the third consecutive meeting without a policy change. Meeting minutes revealed that while rates were held steady, internal dissent reached its highest level since 1992. Four of the "Magnificent Seven" companies reported earnings after the bell, with only Alphabet (GOOGL.US, GOOG.US) appearing to satisfy investors. Alphabet's fiscal first-quarter revenue grew 22% to nearly $110 billion, surpassing analyst expectations. Net profit reached $62.6 billion, an 81% increase year-over-year. Additionally, the company reported record fiscal 2025 sales of $4.03 trillion and profits of approximately $132 billion. Following the better-than-expected results, Alphabet's stock rose over 6% in after-hours trading. Meta Platforms (META.US) and Microsoft (MSFT.US) also posted strong growth but saw their shares decline, with Meta falling more than 5% after hours.
At market close, the Dow Jones Industrial Average fell 280.12 points, or 0.57%, to 48,861.81. The Nasdaq Composite gained 9.44 points, or 0.04%, to 24,673.24. The S&P 500 declined 2.82 points, or 0.04%, to 7,135.98. NXP Semiconductors NV (NXPI.US) surged more than 25%, while NVIDIA (NVDA.US) dropped 1.8%. Qualcomm (QCOM.US) advanced 4%, and Intel (INTC.US) climbed 12%. The Nasdaq Golden Dragon China Index closed down 0.63%, with iQIYI (IQ.US) rising 4.5%.
In European markets, Germany's DAX 30 fell 92.79 points, or 0.39%, to 23,947.50. The UK's FTSE 100 lost 123.43 points, or 1.19%, to 10,209.36. France's CAC 40 declined 31.96 points, or 0.39%, to 8,072.13. The Euro Stoxx 50 dropped 21.01 points, or 0.36%, to 5,813.85. Spain's IBEX 35 fell 133.90 points, or 0.75%, to 17,641.00. Italy's FTSE MIB decreased 245.74 points, or 0.51%, to 47,794.50.
The U.S. dollar index, which measures the greenback against a basket of six major currencies, rose 0.32% to 98.956. By the close in New York, one euro traded at $1.1682, down from $1.1714 the previous session. One pound sterling was worth $1.3483, compared to $1.3518 previously. The dollar bought 160.32 Japanese yen, up from 159.55, and 0.7907 Swiss francs, up from 0.7893. It also traded at 1.3681 Canadian dollars, up from 1.3679, and 9.3074 Swedish kronor, up from 9.2716.
In cryptocurrencies, Bitcoin fell 0.35% to $75,992, while Ethereum declined over 1% to $2,258.
Oil prices rallied sharply. June delivery West Texas Intermediate crude futures rose $6.95 to settle at $106.88 per barrel, a gain of 6.95%. June Brent crude futures increased $6.77 to close at $118.03 per barrel, up 6.08%.
Precious metals edged lower. Spot gold fell 1.15% to $4,543.69 per ounce, while spot silver settled at $71.329 per ounce.
On the macroeconomic front, the Fed's decision to hold rates steady was met with four dissenting votes, the highest number since October 1992, highlighting deepening divisions as Chair Powell's term concludes. According to the FOMC statement, Governor Milan voted against maintaining rates, favoring a 25-basis-point cut. Presidents Harker of Cleveland, Kashkari of Minneapolis, and Logan of Dallas supported holding rates but objected to retaining language suggesting a dovish bias. The statement kept the phrase "further adjustments," which had been expected by some analysts to be removed to downplay hints of future rate cuts. This wording has historically implied a greater likelihood of cuts than hikes. This meeting is widely expected to be Powell's last as Fed Chair.
In corporate news, Amazon's (AMZN.US) cloud business outperformed expectations in the first quarter of 2026, driven by increased corporate investment in cloud services. Amazon Web Services revenue grew 28% to $37.6 billion, exceeding the average analyst estimate of 25.08% growth to $36.61 billion. However, the stock fell 2% in volatile after-hours trading as the company guided for second-quarter operating profit between $20 billion and $24 billion, slightly below the analyst consensus midpoint of $22.62 billion.
Meta Platforms (META.US) reported its strongest quarterly revenue growth in recent periods but indicated it would spend more than initially planned on AI data centers this year. First-quarter revenue was $56.3 billion, a 33% increase, with net profit of $26.8 billion, both beating estimates. The company forecast current-quarter revenue between $58 billion and $61 billion, largely in line with expectations. Capital expenditures for the quarter were $19.84 billion, below market forecasts of $27.57 billion. However, Meta raised its full-year capital expenditure outlook to a range of $125 billion to $145 billion, up from a prior range of $115 billion to $135 billion. The stock fell over 5% after hours.
Microsoft (MSFT.US) reported accelerated growth in its cloud business for the third quarter of fiscal 2026, while its spending increased at a slower pace than anticipated. Capital expenditures rose 49% to $31.9 billion, below the consensus estimate of $34.9 billion. Total capital expenditures for the second quarter were $37.5 billion. Revenue from the Azure cloud division grew 40%, as expected, accelerating from 39% in the previous quarter. This performance may ease concerns that Microsoft's early AI lead was weakening due to slow adoption of its Copilot 365 assistant for enterprises and over-reliance on OpenAI. It also helps justify significant data center investments, which are pressuring cash flow, as major cloud providers are projected to spend over $600 billion on AI infrastructure this year.
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