Wall Street ends higher as Fed holds key rate steady, focus turns to earnings

US stock indexes advanced on Wednesday after the US Federal Reserve left its key policy rate unchanged, as widely expected, leaving investors betting on a rate hike at its next ​monetary policy meeting in December.

In its accompanying statement, the Fed upgraded its assessment of the economy while acknowledging inflation “remains elevated.” At the press conference following the release, ‌Fed Chair Kevin Warsh said the central bank ‌has made clear its willingness and readiness to act.

“The Fed didn’t throw any curveballs,” said Ryan Detrick, chief market strategist at Carson Group in Omaha. “It was widely expected they’d hold, so no big surprise there.”

All three major US stock indexes oscillated following the decision ​and throughout Warsh’s subsequent press conference, but ended the session higher.

“Market participants are getting more used to (Warsh’s) style,” Detrick added.

Financial markets are pricing in an 85.0% likelihood of a 25-basis-point rate hike at the Fed’s December meeting, up from 78.3% on Tuesday, according to CME’s FedWatch tool.

Rate hike forecasts could be swayed by data expected on ​Thursday, including the Commerce Department’s Personal Consumption Expenditures report — which includes the central bank’s preferred inflation gauge — and an advance take on third-quarter GDP.

Third-quarter earnings season is in full swing, with 200 companies in the ​S&P 500 having posted results. Of those, 84% have beaten consensus estimates, according to the most recent LSEG data.

Analysts estimate aggregate ​third-quarter S&P 500 earnings growth of 31.8% year-on-year, up from 30.6% as of October 1, per LSEG.

Memory chipmaker Micron Technology jumped 5.9% after South Korean rival SK Hynix reported a more than sevenfold jump in quarterly profit. SK Hynix’s US-listed shares jumped 13.3%.

The Philadelphia SE Semiconductor index gained 1.8%, notching its fourth consecutive daily advance and bouncing back from its recent selloff.

“I think the market realizes what the Fed did today is one thing, but are AI expenditures continuing?” Detrick said. “That’s what the market’s focused on.”

Microsoft gained over 4% in extended trading after posting quarterly results, while Alphabet shares dropped more than 7% in after-hours trading following the Google parent’s earnings report.