US stocks trade mixed ahead of Fed decision and as investors assess tech earnings

• US stocks traded mixed Wednesday morning as investors looked ahead to the upcoming Fed rate decision.
• Investors are expecting the Fed to keep rates level at 5.25%-5.5% in January.

US stocks slipped on Wednesday as investors digested the latest tech earnings reports and looked ahead to the Federal Reserve's key rate decision later this afternoon.

The Dow Jones Industrial Average ticked higher, while the S&P 500 and Nasdaq Composite slid shortly after the opening bell.

Alphabet and Microsoft shares slumped as traders took in the tech giants' disappointing fourth-quarter earnings reports. Alphabet beat analysts' overall revenue estimates, but reported below-expected ad revenue — a key component of its business model. Shares slid nearly 9% in pre-market trading.

Microsoft also beat analysts' revenue estimates, but not enough to please investors, leading its shares to slide over 1% Wednesday morning.

Investors are waiting on Apple and Amazon to report earnings after the closing bell on Thursday.

In the meantime, all eyes are on the Fed, which is set to deliver its key interest rate decision this afternoon and issue guidance over coming interest rate cuts this year.

Markets are pricing in a near-100% chance the central bank will choose to keep interest rates unchanged today, but are still looking for as many as six rate cuts by the end of 2024. That's about double the number of cuts Fed officials have forecasted for the year, leaving a lot of room for disappointment.

"We think markets are overly optimistic that we'll see a Fed interest rate cut in March. It likely will be midyear before policymakers are confident that they have reined in inflation sufficiently to start cutting their target for short-term interest rates," Vanguard chief global economist Joe Davis said in a statement.

"A pace of three or four rate cuts this year is a much more realistic cadence than the five rate cuts that the market expects, because the economy is still at full employment, which means the Fed can afford to be patient with interest rates to ensure that high inflation has truly been eliminated," according to Treasury Partners managing director Jerry Klein.

Here's where US indexes stood shortly after the 9:30 a.m. opening bell on Wednesday:

• S&P 500: 4,902.16, down 0.46%

• Dow Jones Industrial Average: 38,527.51, up 0.18% (+67.77 points)

• Nasdaq Composite: 15,366.67, down 0.89%

Here's what else is happening today:

• $110 billion is set to be wiped off of Alphabet's valuation as advertising revenues disappoint
• One market legend thinks the S&P 500 is about to slump and a recession could stretch on into 2025.
• A judge sided with a shareholder to strike down Elon Musk's $55 billion compensation package.

In commodities, bonds, and crypto:

• West Texas Intermediate crude oil slipped 0.57% to $77.38 a barrel. Brent crude, the international benchmark, slipped 0.48% to $82.12 a barrel.
• Gold rose 0.32% to $2,043.58 per ounce.
• The 10-year Treasury yield slipped 10 basis points to 3.956%.
• Bitcoin dipped 1.29% to $42,623.79.