Wednesday’s session had every reason to raise. The decision of the Federal Reserve (Fed) was telegraphed. Big Tech profits have soared. Just two days earlier, the Dow Jones Industrial Average (DJIA) had regained 49,000 points. Instead, the index fell from the opening, sold off throughout the afternoon and closed near 48,900, with the 30-stock benchmark falling nearly 0.6%. This is the fifth loss in a row and the second time this week that buyers failed to bring the index above the 48,900 line, which they still treat as a ceiling. The S&P 500 Index closed flat, the Nasdaq Composite posted a slight gain and the 10-year US Treasury yield rose above 4.4%. None of this looks like a market that thinks the next move is up.
It started with the news at four in the morning
Donald Trump posted an AI-generated photo of himself holding a rifle on Truth Social shortly after 0800 GMT, captioned “No more Mr. Nice Guy” and accused Iran of dragging its feet on the nuclear deal. Brent crude rose $110 and West Texas Intermediate (WTI) recovered $100, guaranteeing an inflation problem in the coming months. Then The Wall Street Journal reported that Trump told advisers to prepare for a prolonged blockade of Iranian ports, and the Strait of Hormuz story ceased to be risky and became the dominant macro headline of the day. When the cash registers opened in New York, investors did not buy the declines. They scheduled time for the Federal Open Market Committee (FOMC).
After that, Powell’s farewell became unclear
The release of the FOMC statement at 18:00 GMT should be the basic part. Markets priced in a 100% probability of no change in the 3.5% to 3.75% target range for federal funds rates, and that happened. But they did not expect the most divided vote since 1992. Three officials disagreed because they wanted language referring to mitigating bias removed from the statement, while Stephen Miran went the other way and insisted on a lower vote. “Chairman Powell ends his term with four dissents,” noted Brent Schutte, chief investment officer at Northwestern Mutual, a tranquil statement that becomes more tough when we remember that Powell led the FOMC on a consensus basis for years. KKM Financial’s Jeff Kilburg put it more bluntly on CNBC, taking the disagreements as a warning to Trump nominee Kevin Warsh that the rest of the committee “will not let you bring us here.” Powell himself said the war in Iran makes it tough to chart a policy path and confirmed he will remain on the Board of Governors after his term expires on May 15. The 10-year yield fell to a hawkish note and the Dow extended its losses to a peak.
Eighty seconds, four mega-caps, one uncomfortable topic
The close at 20:00 GMT started a series of quick gains. Microsoft (MSFT), Alphabet (GOOGL), Amazon (AMZN), and Meta (META) joined forces within minutes of each other, with Qualcomm (QCOM) reporting just ahead of them. The headlines looked like a full house. Microsoft Azure grew 40% year over year, well above its own forecast of 37% to 38%. Alphabet’s Google Cloud service rose 63%, almost surpassing the previous quarter’s already hit 48%. Amazon Web Services (AWS) grew 28%, its fastest pace in three years. Qualcomm rose more than 13% from its fiscal 2026 second-quarter print, which topped forecasts, and automotive revenue rose 38% year-over-year to a record high. Walk away after reading these headlines, and Wednesday was shaping up to be a mighty night for tech. Look two layers down and the image will change.
A character that has become too huge to be discarded
Microsoft Cloud’s gross margin has fallen to 66%, and the company has clearly identified investment in AI infrastructure as a headwind. Amazon beat both earnings and gains, yet fell more than 3% in extended trading. Meta, which actually provided first-quarter capex estimates below, took its 2026 capex guidance to a range of $125 billion to $145 billion, which is $10 billion higher on both sides than the previous estimate of $115 billion to $135 billion. When you stack that up against Alphabet’s $175-185 billion target and Amazon’s target of around $200 billion, the four companies’ 2026 capex bill is now close to $650 billion. This number didn’t exist on Wall Street screens 18 months ago, and it’s increasingly what traders are pointing to when asking whether AI revenues can keep pace with AI infrastructure costs. Meta blamed component prices and additional data center costs. Microsoft pointed to the same active. Amazon’s print fade said the same thing, even though no one had to say it. The story is no longer one or two hyperscalers spending huge money on AI. It’s just that everyone is like that and the bar keeps moving higher.
Data that could turn dissidents into a majority
Whether this week’s hawkish split fades into a footnote or becomes a turning point depends on what the next 48 hours show. On Thursday at 12:30 GMT, the first quarter Gross Domestic Product (GDP) print falls along with the March Personal Expenditures Price Index (PCE), with the consensus pointing to GDP of 2.3% y/y compared to the previous 0.5%, headline PCE of 3.5% y/y, and core PCE of 3.2% y/y, both up from last year. Initial jobless claims and the Q1 Employment Cost Index are in the same window, along with the Chicago Purchasing Managers Index (PMI) at 13:45 GMT. On Friday at At 14:00 GMT, the Institute for Supply Management Manufacturing PMI (ISM Manufacturing PMI) will be released with the prices paid sub-index penciled in at 80, making the issue of inflation still lively. A positive surprise on the PCE or ISM Price Paid, and the three officials who wanted the gentle bias gone began to look less like outliers and more like a modern center of gravity. Add in another Trump Truth Social post about Iran, and the question of whether the Dow can break 48,900 from above starts to look like a completely wrong question.
Dow Jones 15-minute chart
Dow Jones FAQs
The Dow Jones Industrial Average, one of the oldest stock indexes in the world, consists of the 30 stocks most frequently traded in the United States. The index is price-weighted, not capitalization-weighted. It is calculated by summing the prices of the company’s shares and dividing them by the coefficient, currently 0.152. The index was founded by Charles Dow, who also founded the Wall Street Journal. In later years, it was criticized for not being representative enough because it only tracks 30 conglomerates, as opposed to broader indexes such as the S&P 500.
Many different factors influence the Dow Jones Industrial Average (DJIA). The most essential are the total results of the companies included in the group, disclosed in quarterly reports on the companies’ results. Macroeconomic data from the United States and around the world also matters because it influences investor sentiment. The level of interest rates set by the Federal Reserve (Fed) also affects the DJIA because it influences the cost of borrowing, on which many corporations depend heavily. Therefore, inflation may be a major factor, along with other indicators, that influence Fed decisions.
Dow Theory is a method of identifying the main trend in the stock market developed by Charles Dow. A key step is to compare the direction of the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA) and only track trends where both are heading in the same direction. Volume is a confirmatory criterion. The theory uses elements of peak and trough analysis. Dow Theory assumes three phases of a trend: accumulation, when clever money starts buying or selling; public participation when wider society is involved; and distribution when the clever money comes out.
There are many ways to trade the DJIA. One is the operate of ETFs, which allow investors to trade the DJIA as a single security rather than buying shares of all 30 companies that comprise it. A leading example is the SPDR Dow Jones Industrial Average ETF (DIA). DJIA futures contracts allow investors to speculate on the future value of the index, and Options provide the right, but not the obligation, to buy or sell the index at a predetermined price in the future. Mutual funds allow investors to purchase a portion of a diversified portfolio of DJIA stocks, thereby providing exposure to the entire index.
