Stock market today: US stocks stall as Fed decision day arrives

US stocks were mixed in cautious trading on Wednesday as investors waited to find out whether the Federal Reserve has shifted its view on how many interest-rate cuts could come this year.

The S&P 500 (^GSPC) was flat at the open on the heels of a fresh all-time closing high for the benchmark. Meanwhile, the Dow Jones Industrial Average (^DJI) fell 0.2% and the tech-heavy Nasdaq Composite (^IXIC) gained 0.2%.

Investors are treading carefully ahead of the Fed’s policy statement at the end of its two-day meeting, given the risk of a shift in its stance. While no change in interest rates is expected on Wednesday afternoon, eyes are on the “dot plot” for any movement in forecasts for the months ahead.

Wall Street analysts suspect that recent hotter-than-expected inflation readings and signs of strength in the US economy could prompt policymakers to forecast rate cuts in 2024, from three previously. That uncertainty could weigh on stocks, and on the broadening of the recent rally.

Bonds could also come under pressure after the Fed statement at 2 p.m. ET. Yields on the 10-year Treasury (^TNX) were slightly lower at around 4.28%, after rising over 20 basis points in the past two weeks.

On the corporate front, Kering (KER.PA) (PPRUY) warned that sales at Gucci, its biggest brand, have fallen 20% in the first quarter. Shares in the luxury group slumped as much as 15% in Paris, wiping $7.6 billion off its market value.

Live3 updates

  • Stocks mixed at the open

    US stocks were mixed in cautious trading on Wednesday as investors waited to find out whether the Federal Reserve has shifted its view on how many interest-rate cuts could come this year.

    The S&P 500 (^GSPC) was flat at the open on the heels of a fresh all-time closing high for the benchmark. Meanwhile, the Dow Jones Industrial Average (^DJI) fell 0.2%, and the tech-heavy Nasdaq Composite (^IXIC) gained 0.2%.

    Most of the day’s heavy trading is expected to come during Fed Chair Jerome Powell’s press conference, which is set to begin at 2:30 p.m. ET.

  • What Wall Street is now doing on Nvidia

    Spending extra time on that Nvidia (NVDA) discounted cash flow model.

    Two days into Nvidia’s GTC conference, analysts are starting to come out with their takes on everything being seen and heard. Of course the Street is staying bullish on Nvidia, with price targets being taken higher. But what I find as interesting is by how much profit estimates on Nvidia are beginning to rise … for 2025!

    No doubt the bar is being lifted much higher once more for Nvidia, to the point where you have to wonder if the stock will get crushed under the weight of expectations (I don’t think we are there yet).

    Good example of this out today from Citi’s Atif Malik. Take note of how much higher he now expects Nvidia’s earnings to be next year:

    “We came away from the first two days of GTC more positive in Nvidia’s ability to vertically integrate its computing, networking, and software technologies with notably its new NVLink Switch technology which helps the new Blackwell platform outperform prior H100 30x on inference workloads. We revise C24/25 EPS by 7%/21% to reflect better-than-expected Blackwell platform pricing or $30-40K vs our prior $20-$30K assumption and lift target price to $1,030 from $820 on consistent 35x PE. Maintain Buy.”

  • The mechanics behind the crypto wipeout

    Bitcoin has been bitten, again.

    About $400 billion in value from the crypto market has been wiped out since bitcoin hit a record high last week of roughly $73,800. Bitcoin itself is down 17% from its record high.

    So what gives here ahead of the bitcoin halving in April? Crypto had been hot!

    Bernstein’s crypto guy Gautam Chhugani offers up an explanation this morning in a client note:

    “As Bitcoin ETFs saw relentless inflows ~$7 billion in the last 30 days. This led to Bitcoin rising ~40% almost equivalent to $4000 billion increase in market cap i.e 57x increase for every $1 billion of inflow. These amplified price moves are driven by spot ETF buying, but also by futures traders positioning themselves long on crypto exchanges based on the strength of ETF inflow data. As a result, funding costs for longing on futures contracts rises higher, until leveraged traders over-extend themselves and deserve a clean up. Bitcoin corrections (20-25%) are par for the course in any bull cycle, and we don’t see the current price move as unusual. Further, based on previous three Bitcoin halvings, investors are positioned as cautious immediately prior to the halving date. With Bitcoin halving 30 days away, we expect general caution, and a continued bull market post halving, once BTC miner risks are cleared.”