Stock Market Today: Stocks Slump After Alphabet Earnings, Fed Meeting
The main indexes closed lower Wednesday after Alphabet's earnings-related selloff and the Fed's hawkish outlook toward rate cuts.


Stocks were mixed in the lead up to this afternoon's policy announcement from the Federal Reserve, with the tech and communication services sectors woefully underperforming following a batch of poorly received earnings updates. However, selling ramped up across all three main indexes after the Fed indicated it is in no hurry to cut interest rates.
Around midday, the Dow Jones Industrial Average was up marginally, while the S&P 500 and the Nasdaq Composite were down around 1% apiece.
Alphabet (GOOGL) was the biggest drag on the S&P 500 and Nasdaq today. Shares of the Magnificent 7 stock plunged 7.5% – shedding $142 billion in market value along the way – as Wall Street weighed disappointing ad revenue over the Google parent's Q4 top- and bottom-line beats. The company also said capital expenditures "will be notably larger" in 2024 vs 2023.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Fellow mega-cap stock Microsoft (MSFT) created its own headwinds for the indexes, shedding 2.7% despite its fiscal second-quarter results coming in above estimates. Additionally, the company forecast fiscal Q3 revenue to arrive between $60 billion and $61 billion, inline with analysts' estimate for $60.9 billion in sales.
"There was no real weakness in the numbers or guidance," says Louis Navellier, chairman and founder of Navellier & Associates. "It just wasn't perfect."
Fed gives cautious rate-cut outlook
But today's main event was the conclusion of the January Fed meeting. As was widely expected, the central bank left the federal funds rate at a range of 5.25% to 5.5%. The real anticipation was around the Fed's outlook for potential rate cuts, and disappointment around this is what sparked widespread selling across Wall Street this afternoon.
Specifically, the Federal Reserve statement indicated the committee "does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably" toward the central bank's 2% target.
Fed Chair Jerome Powell reiterated this in his subsequent press conference, saying the central bank "needs confirmation" before it can be confident that inflation is coming down to its target before it reduces rates. Powell added that while it's encouraging how much inflation has declined, there's still "a ways to go."
"Although the Fed softened some of its hawkish language, they also suggested it wasn't yet clear that inflation was entirely under control," says Chris Larkin, managing director of trading and investing at E*TRADE from Morgan Stanley.
In addition to the sticky inflation numbers we've seen lately, the labor market has remained resilient, Larkin adds. "Friday's jobs data may help clarify the picture in the near term, although even very soft numbers may not be enough to get the Fed to speed up its timeline."
Anthony Denier, CEO of Webull, agrees that "investors need to pay attention to the economic reports, especially those related to inflation and the labor market. The Fed doesn’t want to cut too soon and risk a resurgence of inflation." Denier is expecting the central bank to cut rates three times this year, "probably in June, September and December."
Market still sees a March rate cut
In December 2023, the Fed's dot plot projected three quarter-point rate cuts this year. However, according to CME Group's FedWatch tool, futures traders are pricing in up to six 0.25% rate cuts this year – including a 36% chance of one occurring at the next Fed meeting in March.
At the close, the Dow was down 0.8% at 38,150, the S&P 500 was off 1.6% at 4,845, and the Nasdaq had shed 2.2% to 15,164.
Related content
- 16 Retirement Mistakes You Will Regret Forever
- Mortgage Demand Dips As Supply and Cost Issues Linger
- 25 Fastest Growing Jobs in the U.S.
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

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.
-
If You'd Put $1,000 into Oracle Stock 20 Years Ago, Here's What You'd Have Today
ORCL Oracle stock has been an outstanding buy-and-hold bet for decades.
-
Five Ways to Cash In On the $6,000 'Senior Bonus' Deduction
Taxpayers aged 65 and older may be able to benefit from a $6,000 'senior bonus' deduction over the next four tax years. Here are five ways to make it pay.
-
If You'd Put $1,000 into Oracle Stock 20 Years Ago, Here's What You'd Have Today
ORCL Oracle stock has been an outstanding buy-and-hold bet for decades.
-
Dow Adds 300 Points, Ends Losing Streak: Stock Market Today
The Dow, the S&P 500 and the Nasdaq head into the weekend on high notes after posting gains for the first time since Monday.
-
Stocks Are Down for a Third Straight Day: Stock Market Today
Stocks have come a long way in a short time since April and remain near all-time highs as the end of the third quarter approaches.
-
Stocks Fall Again as Big Tech Struggles: Stock Market Today
The economic calendar was a bright spot for Wall Street Wednesday, with new home sales climbing to a three-year high.
-
How to Invest for Rising Data Integrity Risk
Amid a broad assault on venerable institutions, President Trump has targeted agencies responsible for data critical to markets. How should investors respond?
-
Stocks Drop on Mag 7 Weakness: Stock Market Today
The main indexes retreated from all-time-high territory as several of Wall Street's biggest stocks declined.
-
Stocks Climb as Apple, Nvidia Soar: Stock Market Today
Oracle joined in on the fun, too, after the software giant announced a C-suite shake-up.
-
Trump-Xi Talks Boost Stocks to New Highs: Stock Market Today
Investors, traders and speculators finish a dramatic week in a risk-on mood.