S&P 500 Closes at the Session Low as Three Fed Dissents Point to a September Hike

The Federal Reserve held its target range at 3.5% to 3.75% on Wednesday. Three officials voted against it: Cleveland's Beth Hammack, Minneapolis' Neel Kashkari and Dallas' Lorie Logan all wanted a hike. By the close, fed funds futures priced a 63% chance of a quarter-point increase in September. The S&P 500 finished at 7,316.15, down 112.63 points or 1.52%, at the lowest print of the day. The Dow fell 1,153.18 points or 2.19%, its worst session since April 2025. The Nasdaq Composite lost 1.74% to 24,442.94 and now sits 10.1% below its 52-week high of 27,190.21.

What moved the index

Technology did most of the work. The sector fell 2.64% and, at roughly a third of the index by weight, accounts for about 90 basis points of the 152 basis points the S&P 500 gave up. Semiconductors led the way down: Micron Technology (MU.US) fell 9.94% to $739.00, SanDisk (SNDK.US) 7.32% to $1,015.89, Advanced Micro Devices (AMD.US) 5.51% to $429.56 and Taiwan Semiconductor (TSM.US) 4.50% to $374.67. Nvidia (NVDA.US) fell 3.55% to $190.01.

Industrials fell 3.19% for roughly 26 basis points, and financials 1.60% for another 21. Energy and consumer staples were the only sectors to finish higher, up 1.88% and 0.34%, worth about 8 basis points between them. Those contributions sum to near 150 basis points against the 152 the index actually lost.

The Dow's much wider fall is arithmetic. It is price-weighted, and two of its highest-priced members had bad days. Caterpillar (CAT.US) fell 6.91%, or $58.14 per share, after an analyst downgrade, and Goldman Sachs (GS.US) fell 5.09%, or $52.59. Between them those two supplied 56% of the total dollar decline across all 30 Dow members, roughly 646 of the 1,153 points. Anyone watching only the S&P saw a 1.5% day; the Dow's 2.2% was mostly two share prices.

The final 70 minutes

The S&P 500 opened at 7,423.67, slipped to about 7,343 by late morning, then climbed through the 2:00pm ET statement and Chair Kevin Warsh's press conference to a session high of 7,449.98 at 2:50pm. At that print the index was up 0.28% on the day. Over the next 70 minutes it handed back 133.83 points, or 1.80%, and closed on the low. Traders sold after the press conference, not on the decision itself.

Warsh's line from the podium: "decisions by this committee matter a great deal, and where necessary and appropriate, we will not hesitate to act."

Sector scorecard

Energy's gain traces to oil. Iran launched a ballistic missile attack on US forces overnight, which US Central Command said was fully intercepted, and President Trump told a Fox News reporter the US would hit Iran "hard" in response. West Texas Intermediate settled at $84.60, up 6.74%, and Brent at $90.54, up 7.67%. Occidental Petroleum (OXY.US) rose 3.89%, ConocoPhillips (COP.US) 3.47%, Exxon Mobil (XOM.US) 2.42% and Chevron (CVX.US) 2.28%. Gold settled at $4,126.00, up 2.22%, and the US dollar index eased 0.52% to 100.85. South Korea triggered a circuit breaker for a second straight session.

Top movers

The gainers were almost all earnings reactions. Manhattan Associates (MANH.US) rose 21.32% to $204.02 after beating on the quarter and raising FY26 guidance, with adjusted diluted EPS of $1.39 against $1.31 a year earlier. Lithia Motors (LAD.US) rose 19.30% to $427.48 on second-quarter earnings above consensus. ExlService (EXLS.US) rose 17.88% to $35.99. CBIZ (CBZ.US) rose 17.56% to $54.90 after adjusted EPS of $0.91 beat by 26%, though revenue of $682.2 million came in 2.3% light. Garmin (GRMN.US) rose 16.23% to $294.83 on a second-quarter beat and raised FY26 guidance.

On the losing side, Parsons (PSN.US) fell 35.00% to $40.32 after cutting full-year guidance: revenue down $300 million at the midpoint to a $6.2 billion to $6.5 billion range, and adjusted EBITDA down $115 million to $500 million to $560 million. The cut reflects $118 million of charges, including a $77.5 million pre-tax loss on two contracts held for sale. Lemonade (LMND.US) fell 23.72% to $47.38 even though revenue grew 79.4% to $294.4 million and net premiums earned beat by 2.3%; management flagged sequentially higher third-quarter marketing spend to fund its Car segment, and CFO Tim Bixby will step down at year end. Lennox International (LII.US) fell 20.97% to $430.02 after revenue of $1.5 billion missed a $1.55 billion consensus despite an EPS beat. Fervo Energy (FRVO.US) fell 19.13% to $17.08. Allied Gold (AAUC.US) fell 18.28% to $17.03, with the collapsed Zijin acquisition still in focus.

Three more data center hardware names fell double digits outside the top five. Vertiv (VRT.US) fell 17.26% to $223.04 after second-quarter revenue of $3.27 billion missed a $3.38 billion consensus, even with an EPS beat at $1.52 against $1.42 and raised full-year guidance; management attributed the shortfall to timing shifts from supply-chain congestion on large data center deployments. INNIO (INIO.US) fell 16.97% and Modine (MOD.US) 14.43%. Crypto miners fell as a group: Bitfarms (KEEL.US) 14.86%, Riot Platforms (RIOT.US) 14.12%, IREN (IREN.US) 13.62% and Cipher Mining (CIFR.US) 13.37%.

After the bell

Microsoft and Meta both reported after the close, and the two reactions went opposite ways.

Meta Platforms (META.US) fell almost 10% in extended trading. Second-quarter EPS came in at $6.18, missing by $1.04, and third-quarter revenue guidance of $61 billion to $64 billion put the low end under the $63.15 billion consensus. Expenses rose 55% to $42 billion against 28% revenue growth, and net income fell 14% to $15.8 billion.

Microsoft (MSFT.US) rose about 3%. Revenue of $90.01 billion beat the $87.62 billion consensus, Azure grew 43% in constant currency against a 40.2% estimate, and fiscal 2026 Azure revenue passed $100 billion for the first time.

Also after the close: Fortinet (FTNT.US) rose more than 11% on second-quarter billings and a third-quarter forecast above consensus; Lam Research (LRCX.US) rose more than 6% on adjusted EPS of $1.82 on $6.72 billion of revenue; Starbucks (SBUX.US) rose 5% after raising its full-year outlook on 7.9% same-store sales growth and adjusted EPS of 85 cents against 66 cents expected; Chipotle (CMG.US) rose 3% on a beat at both lines. Carvana (CVNA.US) fell 14% as full-year earnings guidance of $2.7 billion to $3 billion undershot consensus. Qualcomm (QCOM.US) fell more than 5% on adjusted EPS of $2.21 against a $2.23 estimate, despite revenue of $9.95 billion beating $9.67 billion. Robinhood (HOOD.US) fell about 4% as crypto trading volumes dropped. Align Technology (ALGN.US) fell 6% on light third-quarter revenue guidance.

Next session catalysts (ET)

• Meta and Microsoft reprice at the 9:30am open. Meta's expense line, up 55% against 28% revenue growth, is the number the market will read across the rest of the sector.
• Fed funds futures at 63% for a September quarter-point increase keeps that meeting live, which puts more weight on every inflation print before it.
• Exxon Mobil reports second-quarter earnings on Friday. Bank of America cut the stock to neutral on Wednesday, citing the risk that oil retreats if a US-Iran ceasefire lands, and noting that 20% of Exxon's global production sits in a region affected by the Strait of Hormuz disruption.
• WTI settled at $84.60, up 6.74% in a session, and still well below its 52-week high of $119.48.
• The VIX closed at 20.66, up 13.45%, back above 20.

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