Stocks were little changed in afternoon trading Wednesday after the Federal Reserve said it is leaving its key interest rate unchanged near zero, while noting recent improvement in the economy.
The central bank, which issued the policy update at 2 p.m. Eastern after a two-day meeting of its policymakers, said the economy and job market have “strengthened." The Fed acknowledged that inflation has risen, but that it sees the increase as transitory. Signs of rising inflation, and the prospects of higher interest rates, have worried investors and helped fuel a rapid rise in bond yields from where they were at the start of the year.
The Fed also said that it would keep buying $120 billion in bonds each month to try to keep longer-term borrowing rates low.
The S&P 500 was up 0.1% as of 2:21 p.m. Eastern time, with companies split roughly evenly between gainers and losers. The Dow Jones Industrial Average fell 112 points, or 0.3%, to 33,872 and the Nasdaq was down less than 0.1%.
Bond yields were broadly higher. The yield on the 10-year Treasury rose to 1.64% from 1.62% late Tuesday.
Investors have a lot to digest Wednesday, apart from the latest Fed policy statement. Dozens of companies are reporting their quarterly results. After the closing bell, Wall Street will get reports from Apple, Facebook and Qualcomm. Wall Street will also have its eye on Washington, where President Joe Biden was due to give a speech laying out his policy agenda.
Google's parent company, Alphabet. rose 4.2% after the company reported its profits doubled from a year earlier, helped by a surge of digital advertising revenue as more Americans shopped online during the pandemic. Visa rose 1.5% after reporting solid financial results.
Google's solid gains helped send communications stocks higher. Oil prices rose and boosted energy company stocks. Those gains were offset by a downturn in technology and health care companies.
Spotify sank 10.9% after the music streaming company announced that subscriber growth had slowed more than expected.
Biotechnology company Amgen was among the biggest losers. It fell 6.9% after its first-quarter profits and revenue fell short of analysts' forecasts. Investors punished several other companies that came up short with their most recent financial results. Boeing slipped 2.7%.
Also on tap for Wednesday is President Joe Biden’s speech to a joint session of Congress, which is expected to lay out several parts of his agenda such as increased infrastructure spending, likely higher taxes on the wealthy and higher funding for government programs. The $1.8 trillion program will also create universal access to pre-kindergarten schooling as well as provide support for child care programs.