S&P 500, Nasdaq, Dow Futures Inch Higher As Investors Digest First Rate Hike Since 2023 — INTC, GOOGL, AAPL, SKHY, UAL In Focus

• The S&P 500 ended Wednesday 0.5% lower, while the Nasdaq 100 was flat and the Dow Jones Industrial Average eased 1.2%.
• The U.S. Fed also indicated a move toward one additional rate hike this year.
• SK Hynix is exploring options to boost its global competitiveness.

The S&P 500 and Dow ended lower on Wednesday after the Federal Reserve hiked interest rates and hinted at another rate hike this year, citing inflationary pressures. 

The S&P 500 ended Wednesday 0.5% lower, while the Nasdaq 100 was flat and the Dow Jones Industrial Average eased 1.2%. The Russell 2000, which tracks stocks with small market capitalizations, fell about 0.4%.

However, stock futures pared most losses and posted minor gains. Futures tied to the Dow Jones Industrial Average advanced 13 points, or 0.03%. S&P 500 futures were up 0.06%, and Nasdaq-100 futures added 0.1%. 

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY) fell 0.4%, and Invesco QQQ Trust (QQQ) ended Wednesday flat, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) was down 1.2%.

Meanwhile, the VanEck Semiconductor ETF (SMH) and the iShares Semiconductor ETF (SOXX) added above 1%, tracking gains in Advanced Micro Devices (AMD), Nvidia (NVDA) and Micron Tech (MU). The broader Vanguard Information Technology ETF (VGT) rose about 0.4%.

Retail sentiment on Stocktwits for QQQ, SPY, and DIA was ‘extremely bearish,’ with ‘high’ message volumes. 

US Market Drivers

The U.S. Federal Reserve hiked interest rates by 25 basis points (bps), or a quarter percentage point, on Wednesday amid elevated inflation and a strong job market. The Federal Open Market Committee approved the following statement for release by a 12-0 vote.

This move comes as the Fed pivots its attention to inflation amid energy price fluctuations from the conflict in Iran, while the job market remains resilient.

The Federal Reserve projects underlying inflation reaching 3.4% this year, up slightly from the 3.3% estimate in June. Meanwhile, gross domestic product expansion is expected to reach 2.3%, up from the prior 2.2% projection.

“We removed a dose of accommodation so that financial and credit conditions would be more consistent with our ultimate objectives,” Fed Chair Kevin Warsh said during a press conference. “Today’s action starts to show we’re serious about this, and we will deliver on the price stability objective.”

The central bank also hinted at an additional rate hike this year as inflation pressure continues to mount. 

“The Fed’s interest rate hike today is likely to be followed by at least one more later this year, probably in December,” Stephen Brown at Capital Economics told Bloomberg.

Meanwhile, President Donald Trump, in a Truth Social post, demanded interest rates be brought down to 1% or lower. 

Key Trending Stocks

United Airlines Holdings (UAL) and American Airlines Group (AAL) signaled potential capacity reductions in the fourth quarter, while Southwest Airlines Co. (LUV) expects opportunities to raise ticket prices as major carriers navigate persistent fuel cost pressures.

Intel Corp. (INTC) received a glowing Wall Street projection that foresees the chipmaker's stock price roughly doubling over the next two years. 

Blackstone Inc. (BX) and Alphabet Inc. (GOOG, GOOGL): A consortium of major global financial institutions is providing a $22-billion loan to back Crux AI, a newly launched artificial intelligence cloud venture formed by the firms, according to a Bloomberg report.

Apple (AAPL) is reportedly developing enterprise AI servers powered by its own chips that could use Nvidia (NVDA) networking technology, according to a report by The Information. 

SK Hynix (SKHY) pushed back on Wednesday against a Reuters report that claimed the memory-chip maker is in talks with Intel (INTC) to manufacture memory chips in the U.S. for the first time, stressing that no agreement has been finalized. 

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