Wednesday’s market action is dominated by the Federal Reserve’s crucial interest rate decision due at 2 p.m. ET. Investors will also digest earnings from Robinhood, which saw its stock dip post-announcement, and closely monitor the ongoing narrative around AI and data center investments, with Jim Cramer maintaining a positive outlook on the sector.
Wednesday's Market Movers: Fed Rate Decision Looms as Robinhood, Tech Stocks Take Center Stage
The stock market is bracing for a significant Wednesday, with the Federal Reserve's interest rate decision taking center stage. Investors are also closely watching earnings reports from key companies like Robinhood and a continued focus on the artificial intelligence and data center sectors.
Federal Reserve and Interest Rates
The much-anticipated Federal Reserve decision on interest rates is scheduled for Wednesday at 2 p.m. ET. CNBC's senior economics reporter Steve Liesman will provide live coverage from Washington, D.C. Following the announcement, DoubleLine CEO Jeffrey Gundlach is set to appear on "Closing Bell" with Scott Wapner at 3 p.m.
Ahead of the decision, Treasury yields show a complex picture:
- 10-year Treasury note yield: ~4.99%
- 2-year note yield: 4.74%
- 1-year Treasury bill: 4.47%
- 6-month T-bill: 4.36%
- 3-month T-bill: 4.14%
- 1-month T-bill: 4.00%
Bond ETFs also reflect current market conditions:
- iShares 0-5 Year High Yield Corporate Bond ETF (SHYG) dividend yield: 7.13%
- iShares iBoxx High Yield Corporate Bond ETF (HYG) dividend yield: 6.06%
- State Street SPDR Bloomberg High Yield Bond ETF (JNK) dividend yield: 6.79%
- Fidelity Corporate Bond Investment Grade ETF (FCOR) dividend yield: 4.8%
Treasury Secretary Scott Bessent is slated to be on CNBC in the 4 p.m. hour to discuss the Fed's decision.
Robinhood's Earnings and Outlook
Robinhood, the online brokerage, released its earnings on Tuesday afternoon, and the stock reacted negatively, dropping 7% after the bell. While the company met revenue expectations in the third quarter, it missed on earnings, and net income saw a decline. CEO Vlad Tenev is scheduled to appear on "Squawk on the Street" in the 10 a.m. ET hour to discuss the results. The stock is now trading 38% below its October high.
The AI and Data Center Trade
Jim Cramer of "Mad Money" reiterated his bullish stance on the data center and artificial intelligence (AI) sectors, emphasizing the importance of strategic investment choices. He acknowledged the capital-intensive nature of data center companies, noting their reliance on borrowing and the increasing uncertainty surrounding returns due to rising interest rates.
"I'm an unabashed believer in the AI buildup, which I still consider to be the latest industrial revolution," Cramer stated. "I think the world is changing rapidly and for the better. I believe companies will be making money in the data centers and it won't just be all Nvidia."
Several ETFs in the data center and digital infrastructure space are showing mixed performance:
- Global X Data Center & Digital Infrastructure ETF (DTCR): Down 20% from its June high, but up 2.75% in the last two days.
- iShares U.S. Digital Infrastructure and Real Estate ETF (IDGT): Down 15% from its June high, but up 5% in the last two days.
- Pacer Data & Infrastructure Real Estate ETF (SRVR): Down 22% from its May high, but up approximately 2% in the last two days.
Healthcare Companies Reporting
Several healthcare companies are set to report earnings before the market opens on Wednesday:
- Biogen (BIIB): Hit a new high last week, with shares up 26% over the past three months.
- Boston Scientific: Stock is down about 1% in three months, and 57% off its November 2025 high.
- GSK: Shares are down 2% in three months and 18% from their February high.
Following the market close, tech giant Alphabet is scheduled to report its earnings. The stock is down almost 2% in three months and off 21% from its May high. Microsoft will also report after the bell; its stock has gained 36% in three months but remains flat over the past year.
