Today Fundamental Analysis: US indices retreat from their record highs as investors await tech earnings

U.S. stock futures rose early Wednesday as investors prepared for a major day featuring earnings from four Magnificent Seven companies and the conclusion of what could be Jerome Powell’s final Fed meeting as chair. S&P 500, Nasdaq 100, and Dow futures all moved higher after Tuesday’s pullback, when the S&P 500 and Nasdaq retreated from record highs amid weakness in technology stocks.

Tech shares came under pressure after reports that OpenAI missed internal revenue and user growth targets, weighing on companies tied to AI spending such as Oracle, Broadcom, and Nvidia.

After Wednesday’s close, markets will focus on earnings from Alphabet, Amazon, Meta, and Microsoft, with investors looking for strong results to justify heavy artificial intelligence investments.

The Federal Reserve is also expected to keep interest rates unchanged, while traders closely watch Powell’s comments for clues on future policy and the transition to incoming Chair Kevin Warsh.

Asia-Pacific markets traded mixed on Wednesday after Wall Street fell overnight, as investors reacted to fresh developments involving OPEC and weaker sentiment around the AI sector.

A major headline was the United Arab Emirates’ decision to leave OPEC starting May 1, a significant setback for the oil cartel and a move that could reshape global energy market dynamics.

In Asian markets, South Korea’s Kospi moved lower, Australia’s ASX 200 also declined, while Hong Kong’s Hang Seng gained.

Australia’s inflation rate rose to 4.09% in the first quarter, the highest level in more than two years, increasing expectations that the Reserve Bank of Australia may raise interest rates again.

The data comes ahead of the RBA’s policy meeting next week, after rates were already raised to 4.1% in March. Policymakers have warned that inflation remains too high and that rising oil prices linked to Middle East tensions could keep price pressures elevated for longer.

Gold traded in a sideways range near $4,600 during Wednesday’s Asian session as investors waited for the Federal Reserve policy decision and comments from Fed Chair Jerome Powell for clues on future interest rates. The precious metal remains close to a three-week low as the U.S. dollar stays supported by uncertainty surrounding stalled U.S.–Iran peace talks and ongoing tensions over the Strait of Hormuz.

For now, markets are focused on the Fed outcome, which is likely to drive the next major move in both the dollar and gold.

AUTHOR

Ghassan Albohtori 

Financial Market Analyst - STARTRADER

Ghassan Albohtori is a financial market analyst with experience in macroeconomics, investing, and currency trading. He conducts in-depth market research covering fundamental and technical analysis of different instruments to find major changes in market trends. Mr. Ghassan's main focus is the effects of economic data on different asset classes and how this affects prices.

Risk Disclaimer: This material is provided for informational purposes only and does not constitute a recommendation or investment advice. Trading financial instruments on margin involves substantial risk and may not be appropriate for all investors.