By Geoffrey Smith
Investing.com -- U.S. stock markets opened mixed on Wednesday ahead of appearances from both President Joe Biden and Federal Reserve Chairman Jerome Powell.
Biden is set to lay out plans for a big increase in social spending, notably with regard to childcare, and preschool and community college education. The spending is set to be funded, at least in part, through higher taxes on capital gains – something that has weighed occasionally on stock prices since Biden’s election victory last November.
Biden's appearance is likely to upstage Federal Reserve Chairman Jerome Powell, who isn't expected to say anything dramatically new when he gives his press conference after the Fed's latest policy meeting. Argualy the most interesting aspect of the press conference will be Powell's interpretation of the blistering rally in commodities in recent days and weeks, which many analysts - but not (yet) the Fed - see as a prelude to higher inflation.
"No one expects bond buying to end now, but there may be hints at it ending later this year," said Paul Donovan, chief economist with UBS Global Wealth Management, in a note to clients.
By 10 AM ET (1400 GMT), the Dow Jones Industrial Average was down 125 points, or 0.4%, at 33,831 points. The S&P 500 was up 0.2% while the Nasdaq Composite was also up 0.2%, lifted by a sharp rise in Alphabet (NASDAQ:GOOGL) stock in response to blowout earnings reported late on Tuesday.
Alphabet stock rose 6.0% to a new all-time high after reporting a surge in advertising revenue during a winter quarter in which lockdowns once again glued customers to screens, leaving them to use YouTube, Maps and Google’s search more than ever.
Microsoft (NASDAQ:MSFT) also reported strong numbers after the bell on Tuesday, due largely to its Xbox gaming segment and Azure, its Cloud hosting business, but its stock fell 2.9%, on disappointment that they didn’t match even more ambitious expectations.
Behind the platform companies' strength, however, there were visible pockets of weakness in some other growth stocks that have been big winners from the pandemic.
Spotify (NYSE:SPOT) stock tumbled over 10% after it reported earnings that showed subscriber growth slowing. The company is coming into more direct competition with Apple (NASDAQ:AAPL), which recently launched a podcast subscription service. Pinterest (NYSE:PINS) stock also fell 11% after its first-quarter numbers showed monthly average user numbers growing more slowly.
Elsewhere, Boeing (NYSE:BA) stock fell 2.7% after its quarterly update showed orders nearly stagnant and revenue down on the year, despite the resumption of 737 MAX deliveries after they were cleared by regulators to fly again.