(Updates following Fed rate decision)

* Fed leaves interest rate unchanged

* Earnings from Meta, Microsoft ( MSFT ) on tap after the bell

* Ford rises after lifting FY profit outlook

* S&P 500 -0.24%, Nasdaq +0.03%, Dow -1.30%

By Noel Randewich

July 29 (Reuters) - The S&P 500 stayed down on Wednesday

after the Federal Reserve held interest rates steady, while

AI-related chip stocks added to recent declines ahead of

quarterly reports from Microsoft ( MSFT ) and Meta Platforms ( META ).

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.

Ahead of the Fed's announcement, the benchmark S&P 500

hit its lowest level in a month, while the tech-heavy Nasdaq

was down as much as 9% from its June record high.

Investors had mostly expected the Fed to keep rates unchanged.

Inflation has been running above the central bank's target for

more than five years, and up until last month it was

accelerating as the war in the Middle East pushed up global fuel

and food prices.

"Holding rates is the appropriate move in our view. We are

cautiously optimistic about the inflation path and absent a data

trigger, there is no harm in buying time until at least

September," said Christopher Hodge, chief U.S. economist at

Natixis.

Microsoft ( MSFT ) rose almost 1% and Meta Platforms ( META )

was up 0.8%, with both companies set to report quarterly results

after the bell. Their shares are down in 2026 as investors

question the sustainability of their AI spending boom.

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.

Meanwhile, competition from China heats up, both in the race to

develop advanced chips and as Chinese firms roll out cheaper AI

models.

AI-related chipmakers added to recent losses after a sixfold

jump in SK Hynix's ( SKHY ) quarterly profit fell short of

lofty investor expectations, sending the South Korean company's

shares down 10%.

The PHLX chip index fell 2.2% to its lowest since early

May.

AI infrastructure company Vertiv ( VRT ) slumped 15% after

missing quarterly revenue expectations.

The S&P 500 was down 0.24% at 7,410.98 points.

The Nasdaq gained 0.03% to 24,885.34 points, while the Dow

Jones Industrial Average was down 1.30% at 52,062.32 points.

Analysts on average expect S&P 500 aggregate second-quarter

earnings to jump 40% from a year ago, with AI-related stocks

accounting for much of that growth, according to LSEG I/B/E/S.

Strong earnings forecasts and Wall Street's recent decline have

left the S&P 500 trading at about 20 times expected earnings,

just above its 10-year average of 19, according to LSEG data.

Ford Motor ( F ) gained 4% after raising its annual profit

outlook for a second time this year. HVAC solutions maker Lennox

tumbled almost 19% after lowering its annual profit

forecast.

Visa rose almost 1% after the company beat estimates for

quarterly profit, helped by World Cup-fueled travel demand.