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Fed leaves policy rate unchanged as expected

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Fed Chair Powell: further inflation progress not assured

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Job openings hit three-year low

(Updates to market close)

By Stephen Culp

NEW YORK, May 1 (Reuters) -

U.S. stocks closed mixed on Wednesday after the Federal

Reserve left its key interest rate unchanged, as expected, but

indicated that its next move will probably be to cut rates.

The S&P 500 and the Nasdaq ended lower while the Dow Jones

Industrial Average notched a modest gain.

The Federal Open Markets Committee (FOMC) concluded its

two-day monetary policy meeting with a unanimous decision to let

the Fed funds target rate stand at 5.25%-5.50%.

The accompanying statement left the timing of any rate cut

in doubt, and Fed officials underscored their concern that the

first months of 2024 have done little to build the confidence

they seek in falling inflation.

At the subsequent press conference, Fed Chair Jerome Powell

suggested that while the central bank remains focused on

bringing inflation back to its 2% target, he noted progress

toward that goal and dismissed the notion of an imminent rate

hike.

"Powell didn't rock the boat very much," said Ryan Detrick,

chief market strategist at Carson Group in Omaha. "He

acknowledged that inflation is still a problem but remained

optimistic that it will improve over the coming quarters."

"What sparked today's rally was when he said the next

move will not be a hike," Detrick added. "He pushed back against

that, hard. ... That allowed the bulls to take charge."

Powell said the labor market was normalizing, citing data

released on Wednesday showing job openings dropping to a

three-year low.

First-quarter reporting season has breezed passed the

halfway point, with 310 of the companies in the S&P 500 index

having reported. Of those, 77% posted consensus-beating

earnings, according to LSEG.

Analysts now expect aggregate first-quarter S&P 500 earnings

growth of 6.6% year-on-year, a significant improvement over the

5.1% estimate as of April 1, LSEG data showed.

Among individual companies, Advanced Micro Devices ( AMD )

dropped after its disappointing artificial intelligence chip

sales forecast, while Super Micro Computer ( SMCI ) slid

following the company's quarterly revenue miss.

Amazon.com ( AMZN ) rose on better-than-expected quarterly

results as interest in AI helped drive cloud-computing growth.

Johnson & Johnson ( JNJ ) advanced after it said it will

proceed with a proposed $6.48 billion lawsuit settlement over

allegations that its baby powder and other talc products cause

ovarian cancer.

Starbucks ( SBUX ) tumbled after the coffee chain cut its

sales forecast as it posted the first drop in same-store sales

in nearly three years.

CVS Health ( CVS ) plunged after the healthcare company's

earnings fell short of consensus and it slashed its annual

profit forecast.

According to preliminary data, the S&P 500 lost 18.12

points, or 0.36%, to end at 5,017.57 points, while the Nasdaq

Composite lost 54.55 points, or 0.35%, to 15,603.27. The

Dow Jones Industrial Average rose 78.54 points, or 0.21%,

to 37,894.46.