Stock Market Today: Stocks Finish Mixed as Fed Stays the Course

The Federal Reserve and Chair Jerome Powell brought a little cheer to parts of Wall Street on Wednesday, keeping benchmark interest rates steady (as expected) but also indicating that accommodative policy would stick around for some time.

In a release, Powell said that the U.S. labor picture would need to significantly improve before the central bank would pare back its monthly asset purchases.

"The Fed acknowledged that the economy has made progress towards meeting employment and inflation goals so we're likely getting closer to an official tapering announcement, but we still think September is when that is likely to take place," says Lawrence Gillum, fixed income strategist for LPL Financial.

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“Some members continue to express concern about the slow pace of recovery in the labor market, while others are more concerned about rising prices and the economic impact as a whole. Either way, Chairman Powell likely spent most of this meeting wrangling with other Fed officials on the timing and pace of slowing the Fed’s asset purchases,” says Charlie Ripley, senior investment strategist for Allianz Investment Management. “With no imminent decision signaled at this meeting, it appears that it’s going to take a couple more meetings to get everyone on the same page.”

Also front-and-center today were several strong earnings-related performances. Google parent Alphabet (GOOGL, +3.2%) delivered a massive 62% year-over-year jump on revenues as advertising rebounded, Pfizer (PFE, +3.2%) topped Q2 estimates and raised its full-year guidance on strong COVID vaccine sales, and Boeing (BA, +4.2%) recorded a surprise profit after six consecutive quarterly losses.

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The small-cap Russell 2000 led the way with a 1.5% jump to 2,224. The Nasdaq Composite rebounded 0.7% to 14,762, and while the S&P 500 finished with a marginal decline, it closed well off the day's lows, at 4,400. The Dow Jones Industrial Average dipped 0.4% to 34,930.

Other news in the stock market today:

• McDonald's (MCD, -1.9%) was the worst Dow stock today following the fast-food chain's quarterly report. In its second quarter, MCD reported higher-than-anticipated adjusted earnings per share of $2.37 on $5.9 billion in revenue, up 259% and 57%, respectively, on a year-over-year basis. Additionally, global same-store sales surged 40.5% from the same period one year ago. In a subsequent earnings call, CEO Chris Kempczinski noted a "challenging labor environment," but added that it was "getting better" in the U.S. He also said the company is monitoring supply chain issues and the global chip shortage, particularly "on the equipment side."
• Apple (AAPL, -1.2%) was another blue chip that fell after its quarterly earnings report, even as Wedbush called the iPhone maker's fiscal third-quarter a "gold medal" performance. You can read all the highlights from AAPL's "drop-the-mic" quarter here.
• U.S. crude oil futures rose 1% to $72.39 per barrel.
• Gold futures closed marginally lower at $1,799.70 an ounce.
• The CBOE Volatility Index (VIX) slumped 5.5% to 18.29.
• Bitcoin prices bounced a robust 6.3% to $40,307.11. (Bitcoin trades 24 hours a day; prices reported here are as of 4 p.m. each trading day.)

Is It Almost Infrastructure Week?

Another potentially bullish factor that flew under the radar: progress in Washington on an infrastructure deal. Specifically, a bipartisan group of senators agreed Wednesday on major issues for an infrastructure bill that would authorize $1.2 trillion in spending over the next eight years.

"Today was a critical step forward in passing the infrastructure bill; the main issue around payment appears to be resolved," says Josh Duitz, portfolio manager of the Aberdeen Standard Global Income Infrastructure Fund (ASGI). "While we're optimistic a deal will be signed before the August recess, the reality is that infrastructure investment is going to be strong going forwards regardless of what happens on Capitol Hill."

Duitz notes that two potential beneficiaries – green energy and 5G communications – are already on the rise, and that a new bill would only accelerate the revolutions already under way.

Investors looking for intriguing opportunities in the event Washington's bipartisan proposal becomes law should certainly explore both themes, but other industries could enjoy a lift, too. Read on as we delve into 14 of the best stocks to buy if America's aging infrastructure finally receives a cash infusion.