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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

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Indexes: Dow up 0.23%, S&P off 0.34%, Nasdaq down 0.33%

(Updates to 16:09 EDT)

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, and indicated that while its next move

will likely be a rate cut, continued progress on inflation is

not assured.

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

Industrial Average notched a modest gain.

The Federal Open Markets Committee 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 )

shed 9.0% after its disappointing artificial intelligence chip

sales forecast, while Super Micro Computer ( SMCI ) slid 14.0%

following the company's quarterly revenue miss.

The weak results pulled the Philadelphia Semiconductor Index

3.5% lower.

Amazon.com ( AMZN ) rose 2.2% on better-than-expected

quarterly results as interest in AI helped drive cloud-computing

growth.

Johnson & Johnson ( JNJ ) advanced 4.6% 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 15.9% 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 16.8% after the healthcare

company's earnings fell short of consensus and it slashed its

annual profit forecast.

The Dow Jones Industrial Average rose 87.37 points,

or 0.23%, to 37,903.29, the S&P 500 lost 17.3 points, or

0.34%, to 5,018.39 and the Nasdaq Composite dropped

52.34 points, or 0.33%, to 15,605.48.

Of the 11 major sectors in the S&P 500, energy shares

recorded the largest percentage loss, while utilities

led the gainers.

Advancing issues outnumbered decliners on the NYSE by a

1.38-to-1 ratio; on Nasdaq, a 1.50-to-1 ratio favored advancers.

The S&P 500 posted 12 new 52-week highs and 10 new lows; the

Nasdaq Composite recorded 55 new highs and 105 new lows.

Volume on U.S. exchanges was 12.26 billion shares, compared

with the 11.08 billion average for the full session over the

last 20 trading days.