Wall Street closed mixed on Wednesday as investors navigated a confluence of market-moving forces: surging crude oil prices driven by an escalating US blockade of Iranian ports, a Federal Reserve interest rate decision that proved more divided than expected, and high-stakes earnings from four of the “Magnificent Seven” technology giants reported after the closing bell.
The Dow Jones Industrial Average fell 280.12 points, or 0.57%, to close at 48,861.81, notching its fifth consecutive losing session.
The S&P 500 edged down 0.04% to 7,135.95, while the Nasdaq Composite managed a marginal gain of 0.04% to close at 24,673.24.
Oil prices surge on Iran blockade fears
Crude oil dominated the market narrative for a second straight day. Prices climbed sharply after the Wall Street Journal reported that President Donald Trump had instructed aides to prepare for an extended blockade of Iranian ports.
Gains accelerated further after Axios reported that Trump had rejected Iran’s proposal to reopen the Strait of Hormuz, with the US naval blockade set to remain in place until a deal addressing concerns about Iran’s nuclear programme is reached.
US West Texas Intermediate futures surged 7.17% to settle at $107.16 per barrel, while international benchmark Brent crude advanced 6.78% to end at $118.80 a barrel.
A White House official also confirmed that Trump had met with top executives from Chevron and other energy companies to discuss possible steps to calm oil markets should the blockade persist for months.
The supply disruption has rekindled fears of broader inflation.
Fed holds rates in most divided vote since 1992
The Federal Reserve concluded what is likely its final policy meeting under Chair Jerome Powell by leaving its benchmark interest rate unchanged in a range of 3.5% to 3.75%, as markets had widely anticipated.
However, the decision was far from unanimous — the Federal Open Market Committee voted 8-4 to hold, marking the first time four members dissented since October 1992, with members citing different reasons for their votes.
Elevated oil prices “will push up overall inflation” in the near term, Powell said at the subsequent press conference.
Powell also confirmed he would continue to serve as a Fed governor for an indefinite period after his chairmanship ends in May, with Kevin Warsh, Trump’s nominated successor, appearing on track to take over.
Analysts noted that Powell remaining as a governor could make the Fed less inclined to cut rates, as Trump-appointed governors would still compose only three of the seven-member Board of Governors rather than a majority.
Magnificent Seven earnings take centre stage
Much of investor attention on Wednesday was directed toward earnings due after the bell from four of the Magnificent Seven: Alphabet, Amazon, Meta Platforms, and Microsoft.
The quartet faces heightened scrutiny over whether their heavy artificial intelligence capital expenditure is translating into measurable returns.
Microsoft posted stronger-than-expected fiscal third-quarter results, with cloud and AI driving broad-based growth, though shares slipped 2% in after-market trading.
Alphabet beat first-quarter revenue and profit forecasts, with its cloud computing division emerging as the primary growth driver.
Meta Platforms delivered a first-quarter revenue beat but fell short on user growth and capital expenditures, sending shares sharply lower in extended trading.
Sentiment in the technology sector had been rattled a day earlier after the Wall Street Journal reported that OpenAI had recently missed its own revenue and user growth targets.
Wednesday brought some relief on that front, however, as Seagate Technology and NXP Semiconductors jumped more than 11% and 25% respectively after both companies posted earnings beats and offered positive revenue guidance.
The Philadelphia SE Semiconductor index gained 1.5% on the day.
Elsewhere, Starbucks advanced after raising its annual profit forecast, and Visa climbed after the payments company lifted its full-year earnings outlook.
Robinhood Markets declined after the online brokerage missed first-quarter profit expectations.
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