The Dow Jones Industrial Average extended its losing streak to five consecutive sessions on Wednesday, sliding 320 points, or 0.65%, to 48,821.82 in afternoon trading. The broader market also softened, with the S&P 500 dipping 0.21% and the Nasdaq Composite slipping 0.28% as traders adopted a cautious stance ahead of a pivotal Federal Reserve rate decision and a heavy slate of Big Tech earnings.
Brent crude oil surged 7.14% to $119.20 per barrel, while West Texas Intermediate jumped 6.6% to $106.70, following reports that President Donald Trump directed aides to prepare for a prolonged blockade of Iran. The sharp rise in energy prices ripples across the economy, driving up fuel and shipping costs, which could feed into higher inflation and weigh on consumer spending.
Fed Decision and Powell's Possible Final Meeting
All eyes are on the Federal Reserve's 2 p.m. EDT rate announcement. Markets widely expect the central bank to hold its benchmark overnight rate steady. However, the surge in oil prices complicates the inflation outlook, and there is speculation that this could be Chair Jerome Powell's last meeting at the helm. Kevin Warsh, Trump's nominee for Fed chief, advanced through the Senate Banking Committee on a 13-11 vote, setting the stage for a full Senate vote as soon as the week of May 11. Powell's term as chair ends May 15, though he remains on the board until 2028.
Big Tech Earnings in Focus
Microsoft, Alphabet, Amazon, and Meta Platforms are all set to report quarterly results after the bell. These four hyperscalers—the heavyweights building and leasing cloud data centers—are on track to spend more than $600 billion on data center and AI infrastructure this year, according to Reuters. Collectively, they represent roughly 17% of the S&P 500. Amazon edged higher in midday trading, while Microsoft slipped. Meta and Alphabet were relatively flat. Ron Albahary, chief investment officer at Laird Norton Wetherby, described market expectations for earnings growth as "exceedingly optimistic."
Dow Underperformance and Technical Signals
The Dow's five-day losing streak would be its longest since October 2025. The price-weighted index is particularly sensitive to sharp moves in higher-priced components; Boeing and Goldman Sachs were the main drags. Each $1 change in any Dow stock moves the index by about 6.16 points. According to Dow Theory, both the industrial and transportation averages need to hit new highs together to confirm a sustainable rally. The Dow has not recorded a record close since February 10, while the S&P 500 and Nasdaq have reached new highs.
Tuesday's selloff weighed on sentiment, with AI-related concerns dragging chipmakers like Nvidia, AMD, and Broadcom down between 1.6% and 4.4%. Chuck Carlson, head of Horizon Investment Services, noted that OpenAI-related jitters are giving investors "more food for thought" ahead of the megacap earnings.
Outlook
The immediate risk is that Powell sounds hawkish, signaling rates will stay higher to curb inflation, while Big Tech earnings may fail to justify massive AI investments. However, if earnings impress or oil headlines calm, the Dow could rebound quickly, as the current pullback appears driven more by pre-event nerves than a fundamental flight from risk.
