U.S. tech stocks hit a fresh record high Wednesday, while broader markets cautiously navigated a series of risk headlines ahead of what could be one of the most important Federal Reserve meetings in more than a decade.
The Nasdaq trimmed its earlier gains, however, after a much-stronger-than-expected reading of October services activity, based on ISM data, that lifted benchmark 10-year notes to a session high of 1.562% as the 'prices paid' portion of the closely-watched index rose more than 5 points to 82.9, the highest since September 2005.
With growth slowing in China as COVID infections rise and the government lurches from one attack on corporate profitability to the next, Asia stocks trailed global gains with investors eyeing the outcome of today's Fed policy meeting in Washington. European stocks, meanwhile, held near all-time high once traders parsed through another busy slate of corporate earnings and dovish remarks on interest rate moves from European Central Bank President Christine Lagarde.
Fed officials will unveil the results of their two-day policy meeting at 2:00 PM Eastern time, with analysts looking for a $15 billion reduction in the pace of the central bank's $120 billion in corporate and agency bonds each month as part of its broader effort to keep market interest rates low and stimulate growth and employment.
"But this has been so clearly flagged that investors will be much more interested in what Chair Powell has to say about the economy and, specifically, inflation," said Ian Shepherdson of Pantheon Macroeconomics. "We expect Mr. Powell to acknowledge, again, that inflation is higher than the Fed expected and is likely to stay that way for some time yet."
On Wall Street, stocks look primed for a mixed open, with little-changes priced in to the three major benchmarks following beter-than-expected earnings from CVS Health (CVS) - Get CVS Health Corporation Report, Marriott (MAR) - Get Marriott International, Inc. (MAR) Report and Humana (HUM) - Get Humana Inc. (HUM) Report.
The Dow Jones Industrial Average slipped 112 points in the opening hour of trading, while the S&P 500 fell 7.2 points. The tech-focused Nasdaq Composite, which hit a record high of 15,665.88 points earlier in the session, was down 9 points by mid-morning.
CVS Health shares jumped 3.7% after it posted stronger-than-expected third quarter earnings Wednesday, and lifted its 2021 profit forecast, as COVID vaccinations powered solid gains in retail and pharmacy sales.
Bed, Bath & Beyond (BBBY) - Get Bed Bath & Beyond Inc. Report rocketed 28.4% after the home retailer -- and one-time meme stock -- unveiled a distribution partnership with Kroger Co (KR) - Get Kroger Co. (KR) Report and said it would complete its $1 billion share repurchase program by the end of its fiscal year.
Lyft (LYFT) - Get Lyft Inc Class A Report gained more than 9% after the ride-sharing company reported third-quarter earnings that handily beat analysts’ forecasts and said it is seeing a post-pandemic return of passengers and drivers to the roads.
Activision Blizzard (ATVI) - Get Activision Blizzard, Inc. Report fell more than 14% after the video game maker delayed the release of two key titles, while forecasting softer-than-expected holiday quarter sales, as it attempts to move past allegations of workplace harassment and broader issues of sexism in the gaming industry.
Dick's Sports Goods (DKS) - Get Dick's Sporting Goods, Inc. Report shares jumped 7.6% after the sporting goods retailed unveiled a marketing and distribution partnership with Nike (NKE) - Get NIKE, Inc. (NKE) Report.
In other markets, oil prices slumped following reports of a 3.6 million barrel increase in domestic crude stocks from American Petroleum Institute data, taking WTI futures for December delivery $1.74 lower at $82.20 per barrel.
Benchmark 10-year Treasury note yields eased to 1.561% ahead of today's Fed decision and ECB President Lagarde's comments on rate moves at a conference in Lisbon while the dollar index fell 0.1% against a basket of its global peers to 93.997.