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Wall Street closes down sharply after Fed holds rates unchanged | Reuters

SUMMARY
Fed leaves interest rate unchangedEarnings from Meta, Microsoft on tap after the bellFord rises after lifting FY profit outlookS&P 500 -1.52%, Nasdaq -1.74%, Dow -2.19%

July 29 (Reuters) - Wall Street ended sharply lower on Wednesday after the Federal Reserve held interest rates steady, with AI-related chip stocks adding to recent declines ahead of quarterly reports from Microsoft and Meta Platforms and the Nasdaq 100 index marking an 11% drop from its June record high.

The Fed's widely expected ‌decision to leave the benchmark interest rate in the 3.50%-3.75% range drew dissents from three of the 12 members of the policy-setting Federal Open Market Committee who "preferred" a quarter-percentage-point hike at this meeting.

The benchmark S&P 500 (.SPX), opens new tab hit its lowest level in a month, while the tech-heavy Nasdaq Composite index (.IXIC), opens new tab was down about 9% from its June record high.

The Nasdaq 100 index (.NDX), opens new tab dropped 2.1%, extending recent losses as investors unloaded AI-related stocks due to ongoing concerns about heavy capital spending. That index is composed of the Nasdaq exchange's most valuable non-financial companies.

Investors worry that major U.S. companies are deepening a web of AI-linked investments and continuing to funnel billions into the emerging technology at the expense of free cash flow.

Meta Platforms (META.O), opens new tab dropped 4% in extended trade after the social media company said it now expects 2026 capital expenditure to be between $130 billion and $145 billion, compared with its prior forecast of $125 billion to $145 billion.

Also after the bell, Microsoft (MSFT.O), opens new tab climbed 0.6% after it topped Wall Street estimates for quarterly cloud revenue growth, a sign its massive spending on AI infrastructure was paying off.

Meanwhile, competition from China has been heating up, both in the ‌race to ⁠develop advanced chips and as Chinese firms roll out cheaper AI models.

Speaking to reporters, Fed chief Kevin Warsh said spending on AI was laying the groundwork for future growth.

AI-related chipmakers added to recent losses after a sixfold jump in SK Hynix's (000660.KS), opens new tab quarterly profit fell short of lofty investor expectations. The South Korean company's shares fell 10%.
AI infrastructure company Vertiv (VRT.N), opens new tab slumped 17% after missing quarterly revenue expectations...

Eight of the 11 S&P ⁠500 sector indexes declined, led lower by industrials (.SPLRCI), opens new tab, down 3.24%, followed by a 2.5% loss in information technology (.SPLRCT), opens new tab.

https://www.reuters.com/business/sp-500-nasdaq-futures-inch-up-before-fed-decision-chip-stocks-wobble-2026-07-29/

Wall Street closes down sharply after Fed holds rates unchanged
https://www.straitstimes.com/business/companies-markets/wall-street-closes-down-sharply-after-fed-holds-rates-unchanged

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