The Dow Jones Industrial Average and other major stock indexes showed a mixed performance as midday approached on Wednesday, with investors closely monitoring the Federal Reserve’s upcoming interest rate decision and Fed Chair Jerome Powell’s press conference. Notably, Palantir (PLTR) saw its shares surge following a significant contract win, while two leaders in artificial intelligence prepared their earnings reports for release at the market’s close.
After cautious early gains, the Dow was nearing a session high with an increase of 0.5%. The S&P 500 managed to enter positive territory with a slight gain, while the tech-heavy Nasdaq composite faced challenges, dipping 0.3%. The smaller-cap Russell 2000 index rose by 0.3%, marking a recovery after earlier fluctuations and reaching a record high just the previous day.
Market participants are keenly anticipating the Fed’s Summary of Economic Projections for insights into future interest rate trajectories, particularly for 2026. Current indications from the CME FedWatch tool suggest a nearly 90% likelihood that the Federal Open Market Committee will lower rates by a quarter-point during its last meeting of 2025. Additionally, there’s a 70% probability of the Fed maintaining status quo rates in January, with a subsequent 53% chance for March.
Earnings Reports on the Horizon
As the market edges towards the close, Oracle (ORCL) and Synopsys (SNPS)—two significant players in AI—are slated to release their earnings. Oracle’s stock experienced a surge after its first-quarter report earlier this month but recently surrendered those gains ahead of its second fiscal quarter results. Analysts project earnings per share of $1.64 on revenues of $16.2 billion. The stock is currently emerging from a six-week losing streak, gaining momentum and finding support at its 200-day moving average.
In contrast, Synopsys is expected to report fourth-quarter earnings of $2.78 per share, reflecting an 18% decline from the previous year. However, projected sales of $2.2 billion indicate a potential increase of 14%. Following a drop in September, Synopsys has since regained its footing and reclaimed its 50-day moving average, drawing attention due to Nvidia’s recent stake acquisition in the electronic design automation firm.
Positive Movement in Software Stocks
Among the day’s notable movements, shares of Braze (BRZE), a provider of customer management software, surged nearly 15% following a strong fiscal third-quarter earnings report. The company reported a staggering 200% increase in profits, reaching 6 cents per share, along with a 26% growth in revenue, totaling $190.8 million. Analysts forecast earnings of 14 cents per share with sales of $198 million for its forthcoming fiscal fourth quarter.
Challenges in the Aerospace Sector
Conversely, AeroVironment (AVAV) faced a difficult session, plummeting over 10% after announcing a 6% decline in earnings to 44 cents per share for its second quarter, significantly underperforming analyst estimates of 78 cents. Despite achieving a remarkable 151% growth in sales to $473 million, the company downgraded its full-year earnings forecast, causing investor concern.
Palantir’s Recent Achievements
In a positive light, Palantir’s shares advanced more than 1% following its acquisition of a $448 million contract from the U.S. Navy to support submarine fleet management using advanced AI tools. This contract underscores Palantir’s growing influence in defense and technology markets. The stock has managed to rally after a nine-day performance streak, demonstrating resilience at key moving averages and forming a cup base with an all-time high buy point of 207.52.
Market Watch Highlights
Within the Nasdaq 100, Marvell Technology (MRVL) and Axon Enterprise (AXON) emerged as top performers, climbing nearly 3% and over 4%, respectively. Meanwhile, MercadoLibre (MELI) and PDD Holdings (PDD) experienced declines of 3.4% and 2.6%, respectively.
Within the Dow, Amazon (AMZN) and Caterpillar (CAT) showed strength in premarket trading, increasing by 0.7% and 0.5% respectively, while Microsoft faced a nearly 2% decline, jeopardizing its recent four-day winning streak.
As the day unfolds, traders are focused on the Fed’s policy meeting concluding at 2 p.m. ET, with Powell’s press conference set for 2:30 p.m. Expectations are for a continued trend of rate cuts, aimed at assessing economic conditions amid uncertainties in key labor market and inflation data.
In the context of a fluctuating market landscape, investors remain vigilant, adapting strategies based on emerging trends and signals.
