U.S. stocks edge lower as investors weigh earnings, await Fed

What are major indexes doing?

• The Dow Jones Industrial Average
  DJIA,
  -0.31%
  fell 120 points, or 0.4%, to 33,863.
• The S&P 500
  SPX,
  +0.08%
  bobbed up and down between positive to negative territory, up about 1 point at last check at 4,188.
• The Nasdaq Composite
  COMP,
  -0.12%
  shed about 26 points, or almost 0.2%, at 14,065.

On Tuesday, major benchmarks were largely in a holding pattern, with the Dow
DJIA,
-0.31%
posting a gain of 3.36 points, or less than 0.1%, at 33,984.93, while the S&P 500
SPX,
+0.08%
shed less than 0.1% and the Nasdaq Composite
COMP,
-0.12%
gave up 0.3%.

What’s driving the market?

Stocks have struggled for direction this week, with benchmark indexes trading near all-time highs, despite strong earnings and economic data as investors assess how much good news is already factored into the market.

The Fed is expected to leave policy unchanged as it concludes a two-day policy meeting. While the central bank and Fed Chairman Jerome Powell are expected to acknowledge a strengthening economy, policy makers also are expected to remain committed to keeping policy settings loose.

Market participants, however, “are ready to pounce on even the slightest hint of policy normalization amid an economic recovery that is gaining more and more traction,” said Han Tan, market analyst at FXTM, in a note. “As long as the Fed leaves policy settings the way they are at present, U.S. stocks are still more likely to climb to fresh peaks.”

Read: Debt markets getting the memo on the path of likely Fed rate hikes

The Fed will release its policy statement at 2 p.m. Eastern, with Powell’s news conference set to begin at 2:30 p.m.

Need to Know: The Fed is standing aside as house prices rip higher — but here’s what could get in the way

Largely positive results rolled in from a number of major tech companies and other corporate heavyweights late Tuesday and Wednesday, with more to come as one of the busiest weeks of earnings season continues.

Biden, in an address to a joint session of Congress, is set to detail a plan that would see new spending on education, child care, and paid leave, while extending some tax breaks.

Read: Biden to lay out $1.8 trillion family spending plan that calls for capital-gains tax hike

To partly pay for the plan, Biden will propose raising the top tax rate on the wealthiest Americans to 39.6% from 37% and would raise the tax rate on capital gains for people earning more than $1 million a year to 39.6% from 20%. The tax changes are forecast to raise $1.5 trillion over 10 years.

“There’s a lot coming all at once” for the market to absorb, including earnings, taxes and government spending plans, Joshua Wein, a portfolio manager with Hennessy Funds, said in a phone interview Wednesday. He said aerospace giant Boeing Co.
BA,
-2.67%
is among the companies weighing on the Dow, after the plane maker reported a larger-than-expected loss. Shares of Amgen Inc. and Microsoft Corp. also contributed to the blue-chip gauge’s intraday decline.

In economic news, the U.S. trade deficit in goods rose in March for a third straight month, hitting another record high. The advanced trade gap in goods climbed 4% to $90.6 billion in March, the U.S. Census Bureau said Wednesday.

Which companies are in focus?

• Shares of Dow component Microsoft Corp.
  MSFT,
  -2.71%
  were down 3.3% Wednesday after delivering earnings late Tuesday that easily topped Wall Street forecasts.
• Alphabet Inc.
  GOOG,
  +4.86%

  GOOGL,
  +4.04%
  shares were up about 4% after the Google parent served up record profits for a third straight quarter during the pandemic.

• Advanced Micro Devices Inc.
  AMD,
  -0.93%
  late Tuesday said data-center revenue more than doubled as it reported results that topped Wall Street estimates. Shares were down 0.8%.
• Shares of Starbucks Corp.
  SBUX,
  -2.88%
  were down 3.6% after the retail coffee chain reported mixed fiscal second-quarter earnings, with sales slightly below forecasts.
• Shares of Boeing Co.
  BA,
  -2.67%
  were down 3.4% after the plane maker and Dow component reported a larger-than-expected loss.
• Shares of AMC Entertainment Holdings Inc.
  AMC,
  -4.45%
  fell 5.2%, after the theater chain late Tuesday disclosed plans to sell up to 43 million shares in an at-the-market offering, but said it would not ask shareholders to approve the potential sale of 500 million more shares.
• Amgen Inc.
  AMGN,
  -7.47%
  shares dropped 7.2% after the company said profit declined in the first quarter due to lower sales as the COVID-19 pandemic continued to affect patient visits and the diagnosis of new patients.
• Visa Inc.
  V,
  +2.40%
  shares were up 2.1% after the Dow component topped expectations with its latest quarterly results and saw a return to growth for credit transactions.
• Shares of Mondelez International Inc.
  MDLZ,
  +3.66%
  were up 3.5% after the maker of Oreos and other food and beverages reported first-quarter profit and sales above expectations. 
• Shares of Yum Brands Inc.
  YUM,
  +1.12%
  were up 1.1% after the global fast-food company beat first-quarter earnings and revenue expectations.
• Six Flags Entertainment Corp.
  SIX,
  -2.32%
  shares were down 2.5% after the theme park operator reported a narrower first-quarter loss that beat expectations, and a smaller-than-expected fall in revenue, as attendance was more than double what was anticipated.

What are other markets doing?

• The yield on the 10-year Treasury note
  BX:TMUBMUSD10Y
  rose 2 basis points to 1.63%. Yields and bond prices move in opposite directions.
• The ICE U.S. Dollar Index
  DXY,
  -0.08%,
  a measure of the currency against a basket of six major rivals, was down 0.1%.
• Oil futures moved higher, with the U.S. benchmark
  CL00,
  +1.54%
  up 1.8% Gold futures
  GC00,
  -0.21%
  moved lower, falling 0.2% to $1,775.40 an ounce.
• In global equity trading, the Stoxx Europe 600 index
  SXXP,
  +0.02%
  was little changed, while London’s FTSE 100
  UKX,
  +0.27%
  gained 0.3%. The Shanghai Composite
  SHCOMP,
  +0.42%
  and Hong Kong’s Hang Seng Index
  HSI,
  +0.45%
  each rose 0.45%, while Japan’s Nikkei 225
  NIK,
  +0.21%
  gained 0.2%.