Stock market today: Wall Street mixed ahead of the Fed's rate decision

Anxiety over a Chinese startup’s threat to American artificial intelligence dominance eased somewhat Wednesday as focus turned to the
Federal Reserve’s rate decision
due later in the day.

Futures for the S&P 500 and the Dow Jones Industrial Average both shifted between small gains and losses before the bell. Futures for the technology-heavy Nasdaq jumped 0.3%.

Dutch semiconductor company ASML on Wednesday announced record revenue of $9.7 billion, reflecting strong demand for its advanced chipmaking tools despite recent concerns about AI spending raised by Chinese-developed DeepSeek. ASML shares surged 5.3%.

Shares of
Nvidia
, whose chips are powering much of the move into AI and whose
stock has become a symbol
of the surrounding frenzy, were off about 1% on Wednesday. On Tuesday, it recouped a chunk of Monday’s 17% plunge.

Other AI-related companies also held steadier, including chip company Broadcom, which ticked up about 1%.

AI investors rushed for the exits on Monday after
DeepSeek
, a Chinese company, said it was able to develop a large language model that can
perform as well as big U.S. rivals
but at a fraction of the cost. That raised questions about whether all the spending expected for AI chips and electricity will need to happen, though it’s uncertain how much DeepSeek’s development will ultimately upend the AI industry.

Frontier Group Holdings rose 1.5% after announcing it would
trying for a second time
to merge with Spirit Airlines, which sought bankruptcy protection late last year. Frontier said the proposed deal would include newly issued Frontier debt and common stock.

Railroad operator Norfolk Southern inched up about 1.2% after it beat Wall Street’s profit forecasts. There is also
growing optimism
that a Republican-controlled Congress could ease restrictions on the industry.

Facebook parent Meta, Microsoft and Tesla all report their most recent quarterly results after the bell Wednesday.

When the Fed wraps up its meeting later Wednesday, the
widespread expectation
is that the U.S. central bank will leave the federal funds rate alone after raising it three times at the end of last year.

The Fed remains focused on getting inflation back down to its 2% target. Its preferred measure
is currently at 2.4%
, though core prices — considered a better gauge of where inflation is headed — rose 2.8% in November from a year ago.

Fed Chair Jerome Powell
said in December
that the central bank has entered a “new phase,” in which it expects to move more deliberately. Fed officials halved their projection for 2025 rate cuts from four to two.

Wall Street wants lower rates because it fuels economic growth and boosts stock prices.

In Europe at midday, France’s CAC 40 lost 0.2%, while Germany’s DAX added 0.3%, as did Britain’s FTSE 100.

In Asia, most markets were closed for holidays.

Japan’s Nikkei 225 index recovered from Tuesday’s losses, gaining 1% to 39,414.78.

Australia’s S&P/ASX 200 rose 0.6% to 8,447.00 after data from the Australian Bureau of Statistics showed the Consumer Price Index increased by 0.2% in the December 2024 quarter, marking the smallest rise since the June 2020 quarter, when inflation declined during the COVID-19 outbreak.

India’s Sensex was up 0.9%, while the SET in Bangkok shed 0.1%.

In energy trading, benchmark U.S. crude lost 30 cents to $73.47 a barrel. Brent crude, the international standard, dipped 33 cents to $76.16 a barrel.

In currency trading, the U.S. dollar fell to 155.41 Japanese yen from 155.53 yen. The euro cost $1.0388, down from $1.0432.