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Stock Market Today: Dow Climbs as Disney Soars, Alphabet Tumbles; Fed Decision and US-China Talks Loom Large

Stock Market Today: Dow Climbs as Disney Soars, Alphabet Tumbles; Fed Decision and US-China Talks Loom Large cover

U.S. stocks performed mixed on Wednesday as investors weighed hopes for renewed U.S.-China trade talks and braced for the Federal Reserve’s upcoming interest rate decision.

The Dow Jones Industrial Average (DJI) led the major indexes, gaining 0.62% midday, lifted by a surge in Disney shares. The S&P 500 (GSPC) saw a slight increase of 0.16%, while the Nasdaq Composite (IXIC) dropped 0.4%, pressured by a sharp decline in Alphabet stock. A backdrop of geopolitical uncertainty and central bank caution left traders walking a tightrope.

Investors welcomed headlines that Treasury Secretary Scott Bessent and other US officials will meet with Chinese delegates this weekend in Geneva—the first high-level talks since April’s tariff escalation. Still, expectations remain tempered, with both sides signaling that no breakthrough is imminent. Meanwhile, the Fed’s rate decision is expected at 2 p.m. ET, with markets betting on a pause—but closely watching for any shift in tone from Chair Jerome Powell.

Market Movers

Fed Holds Center Stage

Investors are largely betting the Fed will hold interest rates steady, with CME FedWatch data showing a 96% probability of no change. However, the real action comes during Fed Chair Jerome Powell’s press conference. Traders will be listening for clues on how the central bank views the impact of Trump’s tariff hikes, which raised duties on Chinese imports to 145% in April, and what that might mean for the inflation outlook and the timing of any rate cuts.

While rate policy remains data-dependent, Powell's tone could shape expectations for the next six months. Hawkish remarks might push back hopes for a September cut, while dovish language could reignite risk appetite and rally stocks into the summer.

US-China Trade Talks

Markets initially rose after news broke that Treasury Secretary Scott Bessent and other top US officials would meet Chinese Vice Premier He Lifeng in Switzerland this weekend. This is the first face-to-face since Trump escalated tariffs, and the market sees it as a sign of possible de-escalation.

However, Bessent downplayed the idea of an imminent breakthrough, stressing that these are "not advanced" negotiations. Both the US and China signaled that the upcoming meeting would likely focus on easing tensions rather than hammering out a sweeping trade deal. Still, any move to reduce tariffs — or just pause further escalation — could support equities and reduce uncertainty for multinational firms.

Looking Ahead

With major earnings out and geopolitical tensions in the spotlight, markets are entering a pivotal stretch. Investors will closely parse Powell’s remarks this afternoon for guidance on the Fed’s trajectory. At the same time, hopes for US-China détente are tempered, but real — and even a symbolic gesture could buoy sentiment.

Eyes now turn to Geneva this weekend and to inflation data next week. For now, the Dow is riding Disney’s magic, but markets are bracing for more volatility as trade, tech, and monetary policy continue to collide.

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