U.S. stocks edged up on Wednesday ahead of the Federal Reserve’s highly anticipated interest rate decision. The S&P 500 gained about 0.4%, while the tech-heavy Nasdaq Composite climbed roughly 0.8% and the Dow Jones Industrial Average hovered near the flatline, with semiconductor stocks helping lead the rebound.
The gains came as oil prices and Treasury yields retreated from recent highs, giving equities some breathing room after two difficult sessions. Markets overwhelmingly expect the Fed to raise rates by a quarter percentage point, leaving investors focused on the central bank’s updated projections and Chair Kevin Warsh’s remarks for clues about whether additional tightening could follow later this year.
Market Movers:
- Alvotech (ALVO) +8%: Shares jumped after Barclays double-upgraded the biosimilar developer to Overweight from Underweight ahead of an upcoming FDA decision on its lead biosimilar candidate. The firm pointed to an improving risk-reward setup as Alvotech expands its commercial pipeline and U.S. manufacturing presence.
- Twist Bioscience (TWST) +7%: Shares rallied after the company announced a collaboration with Lilly TuneLab, Eli Lilly’s AI and machine-learning drug discovery platform, to provide antibody characterization data. The agreement will connect Twist’s wet-lab antibody services with AI models designed to accelerate the identification and development of promising drug candidates.
- Intel (INTC) +6%: Shares surged following reports that SK Hynix is exploring an agreement that could bring memory-chip manufacturing to Intel’s planned Ohio facility. Options under discussion reportedly include SK Hynix leasing part of the site or forming a joint venture with Intel and major cloud providers, though the talks remain exploratory.
- SK Hynix (SKHY) +2%: Shares advanced alongside Intel as investors weighed the possibility of the South Korean memory giant manufacturing chips in the U.S. for the first time. SK Hynix said it is exploring options to strengthen its global competitiveness but emphasized that no specific arrangement has been finalized.
- FTAI Aviation (FTAI) +3%: Shares gained after the aircraft leasing and aviation services company authorized a new $500 million share repurchase program. FTAI plans to finance the buybacks with existing cash, with the authorization remaining in place through September 2029 unless completed earlier.
- J.B. Hunt Transport Services (JBHT) -10%: Shares plunged after management warned that higher fuel and driver-related expenses could push third-quarter earnings down 5% to 10% sequentially. The company expects roughly $10 million in pressure from fuel volatility and another $25 million from recruiting, training, onboarding and other driver-related costs.
- Vodafone (VOD) -2%: Shares slipped following reports that the telecom giant could face as much as €1.1 billion in potential earnings losses related to the sale of Patrick Drahi’s stake in German broadband venture OXG Glasfaser. The transaction has raised concerns about Vodafone’s financial exposure after the buyer reportedly declined to assume Drahi’s deferred payment commitments.
Fed Decision Takes Focus
Wednesday’s Fed decision is the dominant event for Wall Street, with markets pricing roughly a 93% chance of a quarter-point rate increase. A Reuters poll also found 85% of economists expecting a 25-basis-point hike, which would lift the target range to 3.75% to 4.00%.
With a hike largely anticipated, the bigger question is what comes next. Investors will closely scrutinize the Fed’s updated dot plot and Warsh’s press conference for signs of whether policymakers see persistent inflation as requiring additional tightening before the end of the year.
Oil and Treasury Yields Give Stocks Some Relief
Two major sources of pressure eased Wednesday. Oil prices retreated after their recent surge, while the 10-year Treasury yield pulled back after crossing 5% and reaching its highest levels since 2007. Brent crude remained above $100 per barrel, keeping energy-driven inflation risks firmly in view, but reports of additional Saudi supply helped ease immediate concerns about shortages. The combination of lower crude prices and declining long-term yields helped restore some risk appetite ahead of the Fed announcement.
Retail Sales Show Consumers Are Still Spending
Fresh economic data added another complication to the rate outlook. August retail sales jumped 1.2%, topping expectations for a 0.9% increase and rebounding from July’s decline. The stronger spending figures suggest consumers remain resilient despite higher energy costs and persistent inflation. That underlying strength could reassure investors about economic growth, but it also gives the Fed another reason to remain cautious about declaring victory over inflation.
Looking Ahead
The Fed’s rate decision may be largely priced in, making Warsh’s message potentially more important than the hike itself. Investors will be listening for any indication that September represents a single adjustment or the beginning of a broader tightening cycle as policymakers respond to sticky inflation and elevated energy prices. Wednesday’s rebound in semiconductors is also worth watching after the sharp AI-driven selloff earlier this week. Intel’s rally and renewed optimism around AI infrastructure suggest investors remain willing to return to the chip trade, but the direction of Treasury yields after the Fed decision could determine whether that recovery has room to continue.