* Indexes down: Dow 1.57%, S&P 500 0.85%, Nasdaq 1.13%

* Fed expected to leave rates unchanged, verdict due at 2:00

pm ET

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

* Ford rises after lifting FY profit outlook

(Updates to mid-session trading)

By Johann M Cherian and Ragini Mathur

July 29 (Reuters) - Wall Street's main indexes dropped on

Wednesday as investors awaited the Federal Reserve's monetary

policy verdict against the backdrop of an 8% jump in oil prices,

while chip stocks remained under pressure ahead of Big Tech

earnings.

The benchmark S&P 500 hit its lowest level in a

month, while the tech-heavy Nasdaq was at a three-month

low, dropping over 9% from its June record high.

Chip stocks such as industry leader Nvidia ( NVDA ) fell

2.3% and Micron lost 4.6%, sending the Philadelphia

Semiconductor index down 3.6% to a more than two-month

low.

Industrials slid 2.5% and led declines on the S&P

500, with AI infrastructure company Vertiv ( VRT ) down 13.2%

after missing quarterly revenue expectations.

Quarterly results from Microsoft ( MSFT ) and Meta

are due after the bell, while Amazon.com ( AMZN ) and Apple ( AAPL )

are expected later this week. Traders will closely

watch for signs that their billion-dollar AI investments are

boosting earnings enough to meet their lofty expectations.

Shares of the companies edged lower in early trade, except

for Microsoft ( MSFT ), which added 0.3%.

"What investors are really looking for is some sort of

stable growth," said Louis Kondratev, a trader at XFUNDs.

"If there's not going to be any sort of strong profits or

strong clear growth and especially a clear path towards

rebuilding free cash flow, some of these companies will be

feeling it and their stocks are going to be feeling it too."

Global markets have been volatile this month as investors

questioned the sustainability of the AI spending boom after

signs that major U.S. companies were deepening a web of

AI-linked investments and continuing to funnel billions into the

technology at the expense of free cash flow.

The scrutiny comes as competition from China heats up, both

in the race to develop advanced chips and as Chinese firms roll

out cheaper AI models. On Wednesday, South Korean chipmaker SK

Hynix's ( SKHY ) bumper quarterly results fell short of lofty

investor expectations. U.S.-listed shares of the company

dipped 1%.

At 11:39 a.m. ET, the Dow Jones Industrial Average

fell 829.00 points, or 1.57%, to 51,918.32, the S&P 500

lost 62.98 points, or 0.85%, to 7,365.80 and the Nasdaq

Composite lost 281.06 points, or 1.13%, to 24,595.85.

Recently, tech concerns have prompted investors to focus on

other areas of the market such as consumer staples and

healthcare, which were up 0.5% and 0.4%, respectively,

on Wednesday.

FED IN FOCUS

The Fed will announce its monetary policy verdict at 2:00

p.m. ET amid crude prices soaring to $89.94 a barrel, as

U.S. President Donald Trump said that the U.S. would respond to

Iran's attacks in Jordan.

Traders see a 39.9% chance of a rate hike, according to LSEG

data, after price pressures eased in the prior month.

However,they are confident that rates will rise by at least 25

basis points by year-end.

Markets will scrutinize Chairman Kevin Warsh's comments

after he said the central bank would avoid giving explicit

guidance on future interest-rate moves.

"It's looking like it's going to be more of a hawkish hold,

so that might hit those high-value CapEx-heavy companies that

are anticipated to keep spending," XFUNDs' Kondratev said.

Ford Motor ( F ) gained 4.4% after raising its annual profit

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

tanked 20% after lowering its annual profit forecast.

Declining issues outnumbered advancers by a 2.22-to-1 ratio

on the NYSE and by a 2.32-to-1 ratio on the Nasdaq.

The S&P 500 posted 27 new 52-week highs and two new lows,

while the Nasdaq Composite recorded 92 new highs and 143 new

lows.