Stocks were mixed on Wednesday, with investors digesting a slew of earnings results and looking ahead to another set of reports. A monetary policy statement from the Federal Reserve is also slated for release.
The S&P 500, Dow and Nasdaq struggled for direction, fluctuating between small gains and losses.
Investors eyed the Federal Open Market Committee’s July monetary policy decision, which included new language around the direction for monetary policy going forward. In the updated statement, central bank officials signaled the U.S. economic was making strides toward the Fed’s goals of achieving “substantial further progress” in the recovery, suggesting the start to rolling back crisis-era accommodative policies was nearing.
“Last December, the Committee indicated that it would continue to increase its holdings of Treasury securities … until substantial further progress has been made toward its maximum employment and price stability goals,” according to the July statement. “Since then, the economy has made progress toward these goals, and the Committee will continue to assess progress in coming meetings.”
In the weeks since the Fed’s June meeting, concerns over the Delta variant have brought about additional concerns over the economic outlook. However, inflation prints have also been coming in hotter-than-expected both at the consumer and producer level, challenging the Fed’s ability to keep its ultra-accommodative monetary policy in place. And inflation mentions during corporate earnings calls this season have already risen by a staggering 1,000% over last year, according to Bank of America. But while the Fed acknowledged the latest rise in inflation in its statement Wednesday, it maintained its view that the increases have been “reflecting transitory factors.”
Meanwhile, earnings season rolled on, with a number of Bit Tech companies and major equity index components reporting in the past day. Shares of Google’s parent-company Alphabet (GOOGL) jumped following a strong beat in quarterly sales and profits. A rebound in travel-related advertising spending and continued growth in YouTube ads helped power Alphabet’s revenue, excluding traffic-acquisition costs, to $51 billion, for a surge of 61% over last year.