Stock Market Today: Stocks Fall After Fed Speeches

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Selling on Wall Street resumed Wednesday, with the major benchmarks spending the entirety of the session in negative territory.

In focus today were speeches from several Federal Reserve officials – especially following Fed Chair Jerome Powell's message yesterday that indicated the central bank's fight against inflation is far from over. The latest batch of earnings reports also moved stocks. These included well-received results for ride-sharing firm Uber Technologies (UBER) and pharmacy chain CVS Health (CVS).

When Is the Next Fed Meeting?

The most talked about Fed comments today came from New York Fed President John Williams. In an interview with the Wall Street Journal, Williams said that the Fed still has its work cut out for it, and that the central bank will likely have to maintain a "sufficiently restrictive stance on policy" for a few years in order to bring inflation down to its 2% target.

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"U.S. stocks declined after [New York Fed President] Williams did the pushback that everyone was expecting Fed Chair Powell to do," says Edward Moya, senior market strategist at currency data provider OANDA. "Williams quickly sank risk appetite after he reminded Wall Street that if financial conditions loosen, higher rates may be needed."

On the earnings front, Uber stock jumped 5.5% after the company said fourth-quarter revenue surged 49% year-over-year to $8.6 billion, while adjusted earnings rose to $665 million from $86 million in the year-ago period. Gross bookings were also up, jumping 19% to $30.7 billion.

Meanwhile, CVS reported fourth-quarter earnings of $1.99 per share on $83.8 billion in revenue. Both figures were higher on a year-over-year basis and came in above consensus estimates. The real news for CVS, though, was that it agreed to buy Oak Street Health (OSH, +4.6%) – an operator of primary care centers across the U.S. – for $10.6 billion, including debt. CVS stock rose 3.5% on the day.

As for the major indexes, the Dow Jones Industrial Average fell 0.6% to 33,949, the S&P 500 shed 1.1% to 4,117, and the Nasdaq Composite declined 1.7% to 11,910.

The Best Tech Stocks to Buy

Today's underperformance by the Nasdaq marks a change of pace to what we've seen for most of 2023. Year-to-date, the tech-heavy index is up 13.8%, compared to a 7.3% gain for the S&P 500 and a 2.4% return for the Dow. This follows an absolutely terrible 2022 for the tech sector, which "fell victim to the Federal Reserve's (Fed) campaign to quell inflation by aggressively raising rates," says Quincy Krosby, chief global strategist for LPL Financial.

And even "as the Fed continues to make clear that its job isn't finished, tech stocks nonetheless continue to lead market rallies," Krosby adds. Part of this, she says, is the robust cost-cutting measures technology companies have taken in recent months, including layoffs. But investors are also looking for innovation from these firms, the kind that propels them into our everyday lives. The strategist points to artificial intelligence (AI) as one potential catalyst "that helps drive the sector into its next phase," which makes these top AI stocks worth a closer look. For investors looking for even more opportunities, here are the best tech stocks to buy now. Many names featured on this list are focused on secular megatrends that could continue to power growth for years to come, including AI, cloud computing and cybersecurity.

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With over a decade of experience writing about the stock market, Karee Venema is the senior investing editor at Kiplinger.com. She joined the publication in April 2021 after 10 years of working as an investing writer and columnist at a local investment research firm. In her previous role, Karee focused primarily on options trading, as well as technical, fundamental and sentiment analysis.