US stocks were a mixed bag on Wednesday as investors digested commentary from the Federal Reserve Chair Jerome Powell after the central bank held interest rates steady at its latest policy meeting.

The S&P 500 (^GSPC) and the Nasdaq Composite (^IXIC) fell more than 0.3%, while the Dow Jones Industrial Average (^DJI) rose 0.2%.

Stocks took a noticeable leg higher after Powell said "it is unlikely the next policy move will be a hike," but those gains teetered off in the final hour of trading as earnings appeared to come back into focus.

Notably Technology (XLK), where updates on artificial intelligence have been mixed, fell more than 1%. The Philadelphia Semiconductor index (^SOX) fell more than 3.5% after disappointing earnings results from AMD (AMD) and Super Micro Computer (SMCI).

Bond yields ticked lower throughout Federal Reserve Chair Jerome Powell's press conference on Wednesday.

The 10-year Treasury yield (^TNX) fell about 10 basis points to 4.58% on Wednesday. Similarly, the 2-year Treasury yield fell about 10 basis points to 4.94%. Rising bond yields had been a recent headwind for stocks, and the major indexes responded accordingly on Wednesday with gains in the equity market picking up as yields fell.

Stocks took a noticeable leg higher as Federal Reserve Chair Jerome Powell said further interest rate hikes aren't likely even though inflation's path downward has stalled.

"It is unlikely the next policy move will be a hike," Powell said.

The S&P 500 (^GSPC) rose about 0.8% while Dow Jones Industrial Average (^DJI) and Nasdaq Composite (^IXIC) popped about 1%.

The Federal Reserve held rates steady in a range of 5.25%-5.50% at the conclusion of its two-day policy meeting on Wednesday. The central bank has maintained this range since July after it hiked rates to their highest level in 22 years.

Fed Chair Jerome Powell will hold a press conference at 2:30 p.m. ET.

The main driver of markets today is expected to be Federal Reserve Chair Jerome Powell's press conference at 2:30 p.m. ET.

Entering the action, stocks have been relatively quiet on Wednesday. The S&P 500 (^GSPC) is down about 0.3%, while Dow Jones Industrial Average (^DJI) is up more than 0.3%. The Nasdaq Composite (^IXIC) is lower by about 0.3%.

In bonds, the 10-year Treasury yield (^TNX) is sitting at 4.65%, down about 3 basis points on the day.

Meanwhile, Utilities (XLU) leading the sector action in the S&P 500.

The Federal Reserve will announce its policy decision at 2 p.m. ET, followed by Chair Powell’s press conference at 2:30 p.m. ET.

The central bank is widely expected to hold rates steady, putting emphasis on what Powell says about the likelihood of interest rate cuts this year.

Yahoo Finance's Jennifer Schonberger has the preview:

Fed Chairman Jerome Powell is likely to reiterate at his press conference that there is no urgency to act anytime soon.

The reason: Inflation is stickier than anticipated in 2024.

His message could be a repeat of a higher-for-longer stance taken a couple of weeks ago when Powell said that it would take "longer than expected" to achieve the confidence needed to get inflation down to the central bank’s 2% target.

"Given the strength of the labor market and progress on inflation so far, it's appropriate to allow restrictive policy further time to work and let the data and the evolving outlook guide us," Powell said on April 16.

Markets reacted to those comments by pulling back their expectations for 2024. Traders now are pricing in just one rate cut for the year, down from the median of three cuts estimated by Fed officials in March.

Powell "almost has to be somewhat noncommittal because the question of rate cuts and the timing of rate cuts and even the question of a rate hike are all in the air at the moment," former Atlanta Fed president Dennis Lockhart told Yahoo Finance Live on Monday.

"He simply cannot be definitive on any particular path or policy."

Investors will listen for any hints about how Powell's thinking about cuts has changed and what data is needed before the cuts can begin.

The shift in market expectations comes after three straight months of higher-than-expected inflation readings on two indexes: the Consumer Price Index (CPI) and the Fed’s preferred gauge, the Personal Consumption Expenditures (PCE) Index.

So-called core PCE, which excludes volatile food and energy prices, rose at a clip of 2.8% year over year for the month of March, which was the same level as February and a tenth of a percent higher than expected.

The three-month annualized reading on core PCE jumped to 4.4%, a move economists say is enough to concern Fed officials that inflation may be accelerating.

Starbucks (SBUX) shares tumbled about 17% on Wednesday following a disappointing quarterly results update. As of noon on Wednesday, this marked the worst day for the coffee chain's stock since 2000.

The company missed Wall Street's estimates on a string of important growth metrics, as compiled by Yahoo Finance's Brooke DiPalma:

UBS analyst Dennis Geiger slashed his price target to $85 from $95 following the release while maintaining a Neutral rating on the stock. Geiger noted that limited visbility into when sales in the US and China are expected to pick back up will "likely weigh on shares."

"While management presented plans across throughput, innovation, & marketing / promos to support improved occasional customer demand & traffic over time, we expect pressured transactions for at least the remainder of the year," Geiger wrote in a note to clients.

AMD's (AMD) latest round of quarterly results reminded investors that not all chipmakers are going to see Nvidia-like growth amid the artificial intelligence boom.

The chipmaker reported it expects current quarter revenue in a range of $5.4 to $6 billion, closely in line with Wall Street's estimates for $5.7 billion.

But shares fell more than 7% on Wednesday, reflecting that in-line reports might not be enough for AI investors after a more than 70% run-up in AMD stock over the past year.

Specifically, Wall Street analysts noted that the outlook for AI growth within AMD might not be as robust as some had hoped.

In a note cutting his price target to $185 from $195, Bank of America research analyst Vivek Arya wrote that AMD bulls might've been disappointed in the company's forecast for MI300 chips in 2024, which came in at $4 billion. While an increase from the prior guidance of $3 billion, Arya noted that it felt short of more optimistic outlooks for a range of $5 to $6 billion.

This comes in contrast to Nvidia's (NVDA) recent run of AI dominance where the company has consistently surprised Wall Street's lofty expectations.

"We believe NVDA's vertical integration across systems/software will remain tough for AMD to beat," Arya wrote.

Wedbush analyst Matt Bryson reasoned the price reaction in AMD was investors falling to see the "forest through the trees" in the AI story.

But AMD's move mirrored other drops in the AI trade on Wednesday, pointing to a slowdown in investor enthusiasm around the trade, particularly in names that have rallied heavily over the past year.

Super Micro Computer (SMCI) shares, which had been up more than 700% over the past year, fell more than 17% on Wednesday after the company reported quarterly revenue of $3.85 billion, short of Wall Street's estimates for $3.95 billion but still reflecting about 200% growth compared the same period a year prior.

The company also boosted its full-year revenue guidance to a range of $14.7 billion to $15.1 billion, up from a prior range of $14.3 billion to $14.7 billion.

Even the guidance raise didn't appear to be enough for investors after the stock's recent run, reflecting that good might not be good enough in the AI momentum trade right now.

On a busy day for markets, let's not overlook the latest data on US manufacturing activity from the Institute for Supply Management.

The ISM's Manufacturing PMI reading for April came in at 49.2, suggesting a contraction in the sector.

The report also showed that prices paid for manufacturers rose for the fourth straight month, with this sub-index expanding to a measure of 60.9. The ISM's readings measure the respondents indicating growth minus those indicating contraction.

Growth slowing and inflation growing again will bring to mind for investors one theme: stagflation.

Of course, we're quite a ways away from this scenario. But the market is generally sensitive right now to an environment that could put the Fed, which has a clear preference to begin lower interest rates, in an even tougher spot with respect to its preferred policy path.

Overall, the ISM's report showed the economy remains in expansion territory; as the firm noted in its report, manufacturing readings above 42.5 generally indicate an economy in expansion.

"Demand remains at the early stages of recovery, with continuing signs of improving conditions," said Tim Fiore, chair of the ISM's survey committee. "Production execution continued to expand in March, but at a slower rate of growth than in prior months. Suppliers continue to have capacity but work to improve lead times, due to their raw material supply chain disruptions. Thirty-four percent of manufacturing gross domestic product (GDP) contracted in April, up from 30 percent in March."

Commentary from respondents to the ISM's survey was similarly mixed — some good, some bad, some frustrated, some hopeful.

But as one contact in the electrical equipment industry said: "There has been a lot of volatility in sales. On average, our sales look flat, but the volatility is concerning."

An emerging theme in the US economy, for investors and businesses both.

Job openings ticked lower in March as hiring also decreased, reflecting a slight cooling in the US labor market.

New data from the Bureau of Labor Statistics released Wednesday showed there were about 8.48 million jobs open at the end of March, a decrease from the 8.81 million job openings in February. Economists surveyed by Bloomberg had expected the report to show there were 8.68 million openings in March.

The Job Openings and Labor Turnover Survey (JOLTS) survey also showed the quits rate, a sign of confidence among workers, fell to 2.1%, its lowest level since August 2020.

Meanwhile, the pace of hiring declined in March. The hiring rate fell to 3.5% in March, down from 3.7% the month prior.

Shares of Advanced Micro Devices (AMD) are taking a beating premarket after earnings last night.

This looks to be a classic case of a stock priced for perfection and the quarter and outlook not being 110% perfect.

The company's gaming business looks like it will stay under pressure through 2025, which probably caught the AMD bulls by surprise. It has caused some on the Street to take more measured views on profit potential this year.

AMD CEO Lisa Su did hike her outlook for MI300 AI chip sales to $4 billion for 2024, up from $3.5 billion previously. That has quieted chatter in the market that AMD's new AI chips were inferior to Nvidia (NVDA) in terms of quality.

All in all, not a brutal Starbucks-like (SBUX) quarter by any means. But the Street wanted more and didn't get it.

I have always been hypercritical of Starbucks (SBUX).

I remember covering the company as a stock analyst and spending weeks inside its stores studying the workflows of each department. It was an extreme exercise that did not win me any fans among Starbucks management (especially with former CEO Howard Schultz), but I was young, didn't give a damn what management thought, and believed it had to be done to make a proper call on the stock.

I cut my rating on Starbucks to Sell in January 2014, citing an increasingly complex operating system that was hurting margins, sales potential, and employee relations. Then I wrote an op-ed on CNBC, leaning into the call in the hopes that investors didn't get burned. That, too, didn't win me any fans at Starbucks.

More than 10 years later, my job has changed. I have personally evolved (though I am still as intense as I was in 2014, just in different ways), and I no longer drink 15 coffees (five with one energy drink) a day. But as I sit here today pondering Starbucks' awful, awful earnings call last night (the byproduct of a horrendous quarter) and seeing the stock shockingly plunge 12% premarket (this is Starbucks!), Starbucks is mirroring the company I remember in 2014 — one that is throwing 97 pieces of gum at the wall in the hopes something sticks.

And that all-over-the-place mentality by management is NOT a good thing for shareholders.

Here's what I didn't like about the quarter and call:

As Jefferies analyst Andy Barish pointed out this morning:

Barish is on the mark.

CEO Laxman Narasimhan is officially one year into the top job. Every quarter since he took over has been a letdown, if not increasingly more so than the prior one. He and his team have served up a host of excuses, including blaming bad weather on the call last night.

The bottom line is that the honeymoon is over for Narasimhan, and he now enters the hot seat. If the company doesn't stabilize after a host of new initiatives this summer, he could be taking his favorite Starbucks coffee, the doppio espresso macchiato, out the door of the company's Seattle HQ and into another role elsewhere in 2025.