The S&P 500 reached a milestone level on Wednesday, hitting 7,000 for the first time, before pulling back as the Federal Reserve left interest rates unchanged and upped its economic growth assessment.
The broad market index ended the day down 0.01% at 6,978.03. Earlier, the S&P 500 was up 0.3% on the day, hitting an all-time intraday high of 7,002.28. The Dow Jones Industrial Average added 12.19 points, or 0.02%, to close at 49,015.60. The Nasdaq Composite outperformed and gained 0.17%, settling at 23,857.45.
The Fed kept its benchmark rate steady at a target range of 3.5% to 3.75%. Treasury yields moved up following the decision, as the central bank's statement revealed that economic activity has been "expanding at a solid pace" and that the unemployment rate has "shown some signs of stabilization."
"I think, and many of my colleagues think, it's hard to look at the incoming data and say the policy is significantly restrictive at this time," said Fed Chair Jerome Powell during his press conference.
Based on that reading, Jed Ellerbroek of Argent Capital Management expects the central bank to remain on hold through the end of Powell's tenure in May.
"There's a little bit of tension between inflation being a little bit higher than they want and unemployment rising, and so they're in a roughly neutral position, and they're comfortable sitting there until the data changes and forces them to pick a side," the portfolio manager said. "The ball moves into President Trump's court now, because he will be nominating the new Fed chair."
The broader market's earlier rise was bolstered by gains in chip stocks following upbeat earnings results. Seagate Technology shares jumped 19% after the storage infrastructure company's second-quarter earnings and revenue topped analyst expectations, with CEO Dave Mosley citing strong demand for artificial intelligence data storage. Additionally, semiconductor equipment giant ASML reported record orders and issued rosy 2026 guidance due to the AI boom. However, the stock reversed its gains from earlier Wednesday and booked a 2% decline.
"The story for 2023, 2024, most of 2025 was AI-related semiconductors — awesome, great demand. All the other semiconductor-demand sources, whether that be auto or industrial or telecom, etc. — weak. That has shifted now," Ellerbroek told CNBC. "Demand is well in excess of supply really everywhere at this point within semiconductors."
The rally failed to broaden past chip stocks, however, as the S&P 500 was eventually dragged lower heading into the close.
Meanwhile, earnings from a slate of major technology companies are on deck. Microsoft, Meta Platforms and Tesla are set to post their quarterly financial results Wednesday after the closing bell. Apple will post its results on Thursday.
Outside tech, Starbucks shares ended the session down 0.6%. The coffee chain reported first-quarter adjusted earnings that missed the mark, but posted revenue that surpassed expectations.