U.S. stock markets closed in the red after the Federal Reserve opted to keep interest rates steady while expressing decreased confidence about inflation. Meanwhile, Nvidia continued its downward trend amid reports that former President Donald Trump may impose restrictions on the company’s sales in China.

Although a steady interest rate was widely anticipated, the Federal Reserve omitted phrases about inflation making “progress” towards its 2% goal, instead stating that inflation is still “somewhat elevated.”

Capital Economics’ chief North America economist, Paul Ashworth, still predicts a rate reduction in March, though he states, “that will require a significant downward revision to payroll figures and weak inflation data in January. If the Fed doesn’t start cutting rates soon, it might miss the opportunity entirely.”

The broad S&P 500 index fell by 0.47%, or 28.39 points, closing at 6,039.31. The Dow Jones Industrial Average declined by 0.31%, or 137.08 points, ending at 44,713.27. The tech-heavy Nasdaq dropped by 0.51%, or 101.26 points, to finish at 19,632.32. The yield on the benchmark 10-year Treasury slipped to 4.547%.

Oil prices fell by 1.21%, costing $72.88 per barrel, following a weekly report that revealed U.S. crude oil inventories were higher than expected.

With interest rates unchanged, investors are looking to corporate updates and earnings reports for guidance on market trends. “So far, the earnings season is off to a solid start,” commented Gina Bolvin, president of Bolvin Wealth Management Group.

Focus on Major Tech Stocks

After-hours earnings announcements are expected to steer market direction, particularly as the initial reports from the “Magnificent Seven”—a group of major technology firms—are anticipated. The “Mag-7” includes Apple, Microsoft, Amazon, Alphabet (Google), Tesla, Meta (Facebook), and Nvidia, all of which have a significant impact on major stock indexes and have propelled stock market rallies in recent years.

Earnings reports from Tesla, Meta Platforms, Microsoft, and IBM are scheduled to be released after Wednesday’s market close. Following the upheaval brought on by DeepSeek AI in the tech sector earlier in the week, investors are eager to hear insights from these companies during their earnings calls.

Nvidia saw its stock slide once more on Wednesday after a report from Bloomberg suggested that Trump administration officials are considering restrictions on the company’s semiconductor sales to China. Shares dropped 4.1%, accumulating over a 10% loss for the week.

Mike O’Rourke, chief market strategist at JonesTrading, remarked, “The overall market will have a clearer understanding of the consequences stemming from this DeepSeek disruption. While companies will likely attempt to portray events favorably, any significant ongoing capital expenditures could raise concerns.”

So far, earnings reports have included:

• Tesla reported quarterly results that fell below Wall Street expectations, leading shares to drop more than 3% in after-hours trading.
• Microsoft exceeded second-quarter earnings predictions but reported slower than expected sales growth for Azure cloud services, resulting in a nearly 4% decline in after-hours trading.
• Meta surpassed earnings forecasts for the last quarter of the year, although its sales outlook for the first quarter of 2025 was slightly disappointing. Shares rose about 1% in after-hours trading.

Other Corporate Earnings

Additional companies outside of the major tech sector also released earnings on Wednesday, including:

• ASML saw its shares surge over 4% after the Dutch semiconductor firm reported stronger than expected orders for the latest quarter.
• Danaher reported disappointing earnings and suggested revenue might decline in the current quarter, causing shares to fall nearly 10%.
• T-Mobile posted quarterly earnings that exceeded expectations, which boosted its shares by more than 6%.
• F5, a software company, raised its full-year earnings forecast, leading to an 11.4% increase in its shares.

Trump Media & Technology Group Corp closed up more than 6.5% following its announcement of plans to expand into financial services, including investment products.

Bitcoin Update

Bitcoin experienced an increase early Wednesday; however, it remains largely stagnant as investors await a clearer strategy from Trump regarding his promise to create a Bitcoin strategic reserve.

The cryptocurrency was last recorded up 2.79% at $104,175.00.

Medora Lee is a reporter specializing in money, markets, and personal finance.