New York, April 29, 2026, 4:05 PM EDT
Wall Street’s April rally hit a pause Wednesday. Oil surged. The Federal Reserve, in a split decision, left rates unchanged. Traders braced for after-hours results from Microsoft, Alphabet, Amazon and Meta Platforms.
Awkward timing for the Fed. The central bank’s vote laid bare unusual internal divisions, right as investors brace for updates from four of the biggest AI spenders. These tech giants, according to Reuters, account for upwards of $10 trillion in market cap—around 17% of the S&P 500. The question: are those aggressive data-center investments finally paying off?
LSEG data, arriving late on Reuters, put the Dow Jones Industrial Average down 0.56% to 48,865.25. The S&P 500 edged lower by 0.04% to 7,136.17, while the Nasdaq Composite managed a 0.05% gain to 24,676.75. Brent crude surged 7.34%. The 10-year Treasury yield held at 4.404%.
The Fed left its main overnight rate steady, sticking to a 3.50%–3.75% range. Reuters noted this was the most split vote since 1992: eight policymakers supported the pause, three pushed back on the tilt toward looser policy, and one called for a cut right away.
The S&P 500 slid toward session lows following the Fed’s statement, MarketWatch reported, with FactSet showing the index hovering near 7,116. Fed-funds futures, which traders use to speculate on Fed moves, now suggest a higher probability there will be no rate cuts in 2026.
Powell described the U.S. economy as continuing to grow at a solid clip, though he noted inflation remains “elevated” — with higher global energy prices playing a role. The Federal Open Market Committee, he said, will stick to its meeting-by-meeting approach to rate decisions. Federal Reserve
Things got heated. Brad Conger, chief investment officer with Hirtle & Co., described the Fed debate as “a minor food fight,” adding that hawks seemed to have the edge. Over at Harris Financial Group, Jamie Cox said the statement focused “way more about the future” than anything that happened in Wednesday’s meeting. Reuters
Oil took the spotlight. U.S. crude jumped 6.95% to settle at $106.88 per barrel, while Brent popped 6.08% to $118.03. The move came as investors fretted over the possibility of drawn-out supply issues linked to Iran and the Strait of Hormuz, a critical Gulf passage for oil shipments. “Oil prices were pretty much leading,” said Sam Stovall, chief investment strategist at CFRA Research, noting the lack of any quick fix in sight. Reuters
Attention shifts to Big Tech: Microsoft, Alphabet, Amazon, and Meta—the so-called “hyperscalers”—stand out as the giants powering the cloud infrastructure that supports much of the AI surge. According to Reuters, their combined spending on data centers and other AI-focused infrastructure could top $600 billion this year. Reuters
Chuck Carlson, chief executive at Horizon Investment Services, put it this way: the group is still “the straw that stirs the drinks” for index funds. BCA Research’s chief U.S. equity strategist, Noah Weisberger, noted investors are likely to wait just a few quarters for proof that all that capital spending translates to actual sales. Reuters
The competitive pressure stretches past those four companies. According to Barclays analysts cited by Reuters, Microsoft, Amazon, Meta, Alphabet, and Oracle are set to boost capital spending from 50% of operating cash flow this year to almost 90% by 2027. Apple, another heavyweight in the group, reports on Thursday.
Plenty of earnings volatility hit the tape. NXP Semiconductors surged 26.6%. Shares of Seagate rallied 10.1%. Visa tacked on 9%, while Starbucks gained 9.1% following stronger-than-expected results or guidance. On the downside, Robinhood dropped 14.5% after falling short of first-quarter profit estimates.
There’s risk in both directions here. Persistent high oil could push the Fed to keep its stance tight, despite softer growth. But if the megacaps hint at flagging cloud uptake or pull back on AI outlays, the rally that’s powered chipmakers and data-center names might unravel fast. LPL Financial chief economist Jeffrey Roach warns: investors should brace for more rate market whiplash and a rise in policy dissent.
Powell said he plans to stay on as a Fed governor after his stint as chair wraps up May 15, sticking around “for a period of time, to be determined,” as Kevin Warsh goes through the confirmation process to take the top job. Heading into the after-hours earnings wave, oil sits above $100, bets on rate cuts have faded, and AI remains a hefty chunk of the index. Federal Reserve
