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

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

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

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