U.S. stocks finished broadly higher on Wednesday, with the S&P 500 gaining 0.28% to close at 7,743.98 and the Nasdaq rising 0.27% to 26,549.85.
The Dow Jones Industrial Average added 97.53 points, or 0.19%, to end at 52,475.10.
The Federal Reserve left its benchmark interest rate unchanged in the 3.75% to 4% target range, a move traders had widely anticipated.
According to the CME FedWatch tool, federal funds futures had priced in a roughly 93% probability of a hold ahead of Wednesday's meeting.
Chair Kevin Warsh said at a post-decision press conference that the central bank remains focused on "price stability" even as it paused, and that the employment picture has been "quite positive."
"Nothing today rules out another 25 basis point hike before the end of the year," said Jeff Schulze, chief investment strategist at the Franklin Templeton Institute. "The key question for the market is the pace of tightening, and the committee seems content to reverse last year's rate cuts at a measured pace, which historically has been better for risk assets."
Software company Oracle Corp (NYSE: ORCL) shares jumped more than 11% after the company issued a fiscal 2030 revenue outlook of $225 billion, implying annual growth of 35%. The company also said it would cap additional financing between fiscal 2027 and fiscal 2030 at $20 billion.
Chip stocks also moved higher on Wednesday, lifted by SK Hynix reporting record quarterly profit 鈥?a development that sent the Korean chipmaker's U.S. shares up 13%. Micron Technology Inc (NASDAQ: MU) rose 4%, while Arm Holdings PLC (NASDAQ: ARM) added 3%. Marvell Technology Inc (NASDAQ: MRVL) climbed more than 2%, and Advanced Micro Devices Inc (NASDAQ: AMD) gained about 2%.
Investor attention after the closing bell remained fixed on the artificial intelligence trade, as Alphabet and Microsoft 鈥?two members of the "Magnificent Seven" 鈥?prepared to report their latest quarterly results. The former was last up more than 1%, while the latter slipped nearly 1%.
Tech stocks, particularly those tied to the AI buildout, have struggled in recent weeks amid questions about technology financing.
"The near-term cycle remains very healthy," said Bill Northey, investment director at U.S. Bank Asset Management Group. "The real question is whether it can persist for years, and what kind of returns those investing heavily today will earn. Will it broadly be a profitable endeavor, or will we start to see some winners and losers? We lean toward the latter."
In recent weeks, tech stocks, especially those deeply involved in AI infrastructure, have come under pressure from concerns related to AI financing. Still, Morgan Stanley chief U.S. equity strategist Mike Wilson believes the current tech pullback may be nearing its end.
Across the Atlantic, the pan-European Stoxx 600 fell 0.27%, the U.K.'s FTSE 100 dropped 0.33%, France's CAC 40 declined 0.13%, and Germany's DAX slipped 0.11%.
In Asia, Japan's Nikkei 225 closed up 1.08%, South Korea's Kospi surged 6.63%, Australia's S&P 200 was roughly flat, and mainland China's CSI 300 finished 0.85% higher.
Bank of America took a contrarian view on rate hikes, saying the Fed has solid reasons to raise rates in October. If it holds steady in October, the Fed retains only the option of acting at one meeting; if it hikes in October, it preserves flexibility to raise again in December, bringing the tightening cycle more in line with 2024 and 2025 rate-cut expectations. Given more threatening inflation data, the latter approach carries greater strategic value.
With a $4.1 trillion financing gap looming, the real highlight for Treasuries comes next week. JPMorgan aligns with market consensus, with its fixed income strategy team led by Jay Barry saying it expects the Fed to stand pat, though there could be more than one hawkish dissent. Cleveland Fed President Hammack and Dallas Fed President Logan are expected to cast hawkish dissenting votes, with Minneapolis Fed President Kashkari at risk of joining them. For the Treasury market, next week's quarterly refunding announcement is the true main event. The Treasury will release quarterly borrowing estimates on Nov. 2 and the full refunding statement on Nov. 4. JPMorgan expects coupon auction sizes to remain unchanged. The underlying figures: a fiscal 2026 deficit of $1.992 trillion, just $28 billion narrower than the bank's forecast, and a fiscal 2027 deficit forecast held at $1.960 trillion. Under current auction plans, the funding gap from fiscal 2027 to fiscal 2030 reaches $4.1 trillion. The report argues that cutting long-end auctions to suppress yields lacks structural merit and would only shift financing pressure to short-term debt.
Purchases of U.S. Treasuries by pro-U.S. countries plunged 60% in the first eight months, with Japan down 99% and South Korea posting record net sales. Based on data from the U.S. Treasury Department and State Department, in the first eight months of 2026, countries and regions closely aligned with the United States net purchased $174.3 billion of U.S. medium- and long-term Treasuries excluding short-term bills, a new low for the same period since 2021 and a year-on-year decline of more than 60%. The shift is especially notable in Asia, where economies that have long run large surpluses are reducing allocations of excess funds to U.S. debt. Japan, the largest overseas holder of U.S. Treasuries, net bought just $389 million in the first eight months of this year, a 99% year-on-year plunge. South Korea net sold $23.8 billion, the largest same-period reduction since records began in 1977. Taiwan, China, was also in a net selling position.
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