Futures tied to the tech-heavy Nasdaq-100 fell Wednesday after a pair of megacap tech companies posted their quarterly results. Wall Street also looked toward the Federal Reserve’s decision on rate policy. Nasdaq-100 futures declined 0.9%. Futures tied to the S&P 500 were down 0.4%, while Dow Jones Industrial Average futures rose slightly. In after-hours trading, shares of Alphabet dropped more than 5%, while Microsoft slipped 1.6% after the tech giants posted quarterly earnings. To be sure, both companies managed to beat on both top and bottom lines. However, ad revenue for Alphabet came short of analysts’ expectations. The pullback in Alphabet and Microsoft shares, despite the companies’ largely positive results, may be more of a short term, “buy on rumors, sell on news information” trend, according to Sam Stovall, chief investment strategist at CFRA Research. “Even though you’re getting better-than-expected results, people may be selling because they just want to take the money and run,” he said. The tech sector — which has powered the market rally from 2023 into 2024 — is now trading at a relatively high valuation of nearly 29 times its 2024 earnings, according to Stovall. With this in mind, investors will need to see earnings expansion in order for the tech companies to be able to maintain their elevated price-to-book levels, said the strategist. “It’s not that investors will be willing to pay up and have multiple expansion later, but rather — now it’s time to put up or shut up,” Stovall said. “It’s time to increase the earnings to justify these higher valuations.” The action follows a mixed day for stocks. On Tuesday, the S&P 500 inched down by 0.06%, while the Nasdaq Composite lost 0.76%. The Dow was the outperformer, adding 0.35%. The Fed’s rate decision will be front of mind for traders on Wednesday. The fed funds futures market has priced in a nearly 98% probability that the central bank will leave rates unchanged, according to the CME FedWatch tool. Investors will be looking for clues on shifts in the central bank’s policy stance in its post-meeting statement and in Fed Chair Jerome Powell’s remarks. Policymakers will likely adopt a “later and fewer approach,” in which the Fed starts cutting rates later than what most of the market is expecting, said Stovall. “The Fed doesn’t want to repeat the mistakes of the past about being too aggressive with the rate cuts,” Stovall said. U.S. Treasury yields declined on Wednesday as investors awaited the latest interest rate decision and guidance on the monetary policy outlook from the Federal Reserve. The 10-year Treasury yield was 3.7 basis points lower at 4.02%. The yield on the 2-year Treasury was last down by more than 5 basis points at 4.31%. Mainland Chinese stocks fell to a five-year low while Australian stocks smashed all-time records on Wednesday. The S&P/ASX 200 gained 1.06% and closing at 7,680.7, surpassing its previous record high of 7,632.8 set back on August 13, 2021. This comes after the country’s fourth-quarter inflation rate was lower than expected at 4.1%, its lowest level since the quarter ended December 2021. China’s CSI 300 slid to a five-year-low, sinking 0.91% to close at 3,215.35 after China’s manufacturing activity shrank for the fourth straight month in January, with the official manufacturing purchasing index at 49.2. Hong Kong’s Hang Seng index dropped 1.78%. Other Asia-Pacific markets were mixed. Japan’s Nikkei 225 closed 0.6% higher at 36,286.71, while the broad based Topix also ended nearly 1% higher at 2,551.10. South Korea’s Kospi was down 0.07% at 2,497.09, while the small cap Kosdaq saw a bigger loss of 2.4% closing at at 799.24. Oil prices are on pace for the first monthly gain since September as the U.S. and Iran stand on the brink of a more direct confrontation in the Middle East. The West Texas Intermediate contract for March was last down $1.09, or 1.40%, to trade at $76.73 a barrel on Wednesday. The Brent contract for March was trading at $81.90 a barrel, down 97 cents or 1.17%. Prices fell Tuesday after China factory activity contracted for the fourth consecutive month. WTI and Brent, however, are up 6.98% and 6.31% respectively for January. Gold prices are set to end the first month of 2024 in negative territory, snapping a three-month gaining streak on Wednesday, as investors reduced their expectations of early interest rate cuts this year as they await the U.S. central bank’s outlook on policy rates later in the day. Spot gold was flat at $2,036.88 per ounce by 1040 GMT, while U.S. gold futures rose 0.3% to $2,036.70.