US stocks edged higher on Wednesday, with the S&P 500 rising 0.2%, the Nasdaq gaining 0.1%, and the Dow Jones climbing roughly 170 points, as markets stabilized following two sessions of declines. The modest rebound was driven by renewed optimism over trade diplomacy and solid corporate earnings, helping to offset caution ahead of the Federal Reserve’s key policy announcement later in the day.
US stocks rise for the first time in three days
Investor sentiment received a boost from news that high-level US-China trade talks are scheduled for this weekend in Switzerland. Treasury Secretary Elizabeth Bessent stated that while the talks are not aimed at clinching a full agreement, the goal is to establish a roadmap for de-escalation. Market participants interpreted the meeting as a constructive first step that could eventually lead to tariff reductions and improved trade flows, particularly important as supply chains remain strained and input costs elevated.
Meanwhile, anticipation mounted ahead of the Federal Open Market Committee (FOMC) decision, with the Fed widely expected to leave rates unchanged. However, the market focus is squarely on Chair Jerome Powell’s press conference, as traders look for signals on the timing and pace of potential interest rate cuts. Recent softer economic data and mounting political pressure from the White House have fueled speculation that the Fed may pivot more dovishly in the coming months. Futures markets are currently pricing in two rate cuts by the end of 2025, with the first potentially as early as September.
Earnings remain pivotal
On the corporate front, earnings remained a key driver of market action. Shares of Disney surged more than 9% after the entertainment giant reported an unexpected increase in Disney+ streaming subscribers, defying analyst concerns about stagnating growth in the media segment. The company also beat profit expectations and reaffirmed guidance, bolstering confidence in its restructuring efforts. Semiconductor firm Advanced Micro Devices (AMD) gained 3.4% after topping earnings estimates and issuing an upbeat revenue forecast driven by robust AI chip demand.
On the downside, shares of Uber fell 6% after the ride-hailing company posted quarterly revenue below expectations, citing weaker-than-expected gross bookings in international markets. The stock's drop weighed on broader transportation and tech sectors. Energy stocks, meanwhile, were mixed as oil prices struggled to maintain earlier gains amid fluctuating supply signals and geopolitical developments in the Middle East.
Overall, market breadth was slightly positive, though trading volumes remained somewhat subdued as investors opted for caution ahead of Powell’s remarks. Treasury yields held steady, while the dollar weakened slightly on improved risk sentiment and growing hopes for trade thaw. Volatility indicators such as the VIX edged lower, reflecting easing market jitters.
