Nasdaq, S&P 500 Slip Ahead Of Fed Meeting, Regional Banks Sink After NYCB Disappoints: What's Driving Markets Wednesday?

Zinger Key Points
  • Tech stocks plummeted ahead of the FOMC meeting, with the Nasdaq 100 dropping 1.4% due to disappointing quarterly earnings from tech giants.
  • Job growth slowed, as indicated by the ADP report, and bond yields fell, leading to gains in Treasury bonds. Regional banks face pressures.

It’s a volatile day on Wall Street as tech stocks reacted to disappointing quarterly earnings ahead of the highly anticipated Federal Open Market Committee (FOMC) meeting.

What Happened: In the lead-up to the FOMC meeting — scheduled for 2:00 p.m. ET on Wednesday, Jan. 31 — the tech-heavy Nasdaq 100 slipped 1.4%. This marked its worst session since early January.

Here’s a breakdown:

  • Alphabet Inc. GOOGL is down 6%, due to disappointing results for the quarter ending in December.
  • Advanced Micro Devices Inc. AMD, a prominent player in the artificial intelligence space, also fell on softer-than-expected results.
  • The broader market, as measured by the S&P 500 index, fell 0.9%.
  • The pace of job growth slowed from 158,000 in December to 107,000 this month (below the expected 147,000), according to the ADP National Employment Report.
  • The CBOE Volatility Index, also known as the market fear gauge or VIX, rallied 8%. Bonds gained ground as investors adopted a more cautious approach. Treasury yields fell across all key maturities, with the 10-year yield falling below the 4% mark.
  • The popular iShares 20+ Year Treasury Bond ETF TLT soared 1%.
  • On the banking front, the SPDR S&P Regional Banking ETF KRE fell 3.7% on track for the worst session since May 2023 amid disappointing results from New York Community Bancorp Inc. NYCB.

Wednesday's Performance In Major Indices, ETFs

Major IndicesPrice%
Dow Jones38,466.450.0%
Russell 20001,980.19-0.8%
S&P 5004,885.26-0.8%
Nasdaq 10017,252.38-1.3%
CBOE VIX14.388.0%

The SPDR S&P 500 ETF Trust SPY was 0.9% lower to $486.56, the SPDR Dow Jones Industrial Average DIA held steady at $384.46 and the tech-heavy Invesco QQQ Trust QQQ fell 1.4% to $419.13, according to Benzinga Pro data.

Sector-wise, the defensive Utilities SPDR Select Sector Fund XLU outperformed, up 0.7%. Both the Technology SPDR Select Sector Fund XLK and the Communication Services SPDR Select Sector Fund XLC underperformed, down 1.6%.

Wednesday’s Stock Movers

  • Alphabet Inc. fell 6.6% on its worst session in three months. While beating both revenue and earnings estimate, the tech giant delivered weaker-than-expected advertising revenue.
  • Advanced Micro Devices Inc. fell 3.1% after broadly matching Street’s earnings estimate, but issuing a first quarter 2024 guidance below expectations. Chipmaker peers such as NVIDIA Corp. NVDA and Broadcom Inc. AVGO fell 1.9% and 2% respectively.
  • Microsoft Corp. MSFT fell 1.4%, despite reporting stronger-than-expected results last quarter and receiving several price-target boosts from sell-side analysts.
  • New York Community Bancorp Inc. plummeted 35% on its worst day since the company went public in 1993. The regional bank reported a loss last quarter, largely disappointing estimates of a positive net income, and revenue also surprised to the downside.
  • Boeing Company BA rallied nearly 7% after reporting stronger-than-expected results, with the company CEO prioritizing the need to address safety and quality issues above all during the call with investors.

Other companies reacting to earnings include:

  • Starbucks Corp. SBUX, down 0.7%
  • Mondelez International Inc. MDLZ, down 1.7%
  • Marathon Petroleum Corp. MPC, down 3.3%
  • Electronic Arts EA Inc. EA, up 1.1%
  • Mastercard Corp. MA, up 1.1%
  • Thermo Fisher Scientific Inc. TMO, down 3.8%
  • Boston Scientific Corp. BSX, up 2.9%
  • Old Dominion Freight Line ODFL, down 0.2%
  • Phillips 66 PSX, up 1.9%
  • Automatic Data Processing Inc. ADP, up 2.8%.

Companies set to report their results after the closing bell Wednesday are Qualcomm Inc. QCOM, MetLife Inc. MET, Aflac Inc. AFL.

Now Read: Microsoft Enjoys ‘First-Mover Advantage’ As AI Revenue Doubles, 5 Analysts Explore Q2 Print

Image: Shutterstock

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Date
ticker
name
Actual EPS
EPS Surprise
Actual Rev
Rev Surprise
Posted In: Analyst ColorEarningsEarnings BeatsEarnings MissesLarge CapMacro Economic EventsMid CapBroad U.S. Equity ETFsSmall CapEventsEcon #sTop StoriesEconomicsFederal ReserveIntraday UpdateAnalyst RatingsTechETFsAIartificial intelligenceExpert IdeasFOMC Meetingregional banksStories That Matter
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!