Stocks rallied higher on Wednesday as the Federal Reserve kept interest rates unchanged and market participants rotated back into tech names. The Dow Jones Industrial Average climbed nearly 100 points, while the S&P 500 Index and Nasdaq Composite added 1.6% and 2.6%, respectively.

Here's how the market settled on Wednesday:

S&P 500 Index (SPY  ): +1.58% or +85.86 points to 5,522.30

Dow Jones Industrial Average (DIA  ): +0.24% or +99.46 points to 40,842.79

Nasdaq Composite Index (QQQ  ): +2.64% or +451.98 points to 17,599.40

FedWatch:

The Federal Reserve held benchmark interest rates at their current target range of 5.25% to 5.5% on Wednesday, but highlighted that the U.S. economy has continued to improve.

"In recent months, there has been some further progress toward the Committee's 2 percent inflation objective," the central bank said. "The Committee judges that the risks to achieving its employment and inflation goals continue to move into better balance."

Fed Chair Jerome Powell also signaled that a September rate cut may be necessary to further support the economy, a move that is widely expected by market participants.

"The question will be whether the totality of the data, the evolving outlook and the balance of risks are consistent with rising confidence on inflation and maintaining a solid labor market," Powell said during an afternoon press conference. "If that test is met, a reduction in our policy rate could be on the table for as soon as the next meeting in September."

In Economic News:

Private Payroll additions slowed in July while wage growth waned, payrolls processing firm ADP reported Wednesday, providing labor market incites ahead of the month's "official" jobs report due out on Friday.

U.S. companies added 122,000 jobs on the month, marking the slowest pace since January and coming in below June's upwardly revised print of 155,000. Wages for workers ramining in their positions increased 4.8% year-over-year, ADP reports, in its smallest rise since July 2021 and decreasing by 0.1 percentage point from June's growth.

"With wage growth abating, the labor market is playing along with the Federal Reserve's effort to slow inflation," said Nela Richardson, chief economist at ADP, in a statement. "If inflation goes back up, it won't be because of labor."

On the Earnings Front:

Microsoft (MSFT  ) shares were under pressure on Wednesday as the tech giant reported disappointing cloud results amid its otherwise strong fiscal fourth-quarter earnings. The company's leading segment, Intelligent Cloud, saw revenues rise 19% to $28.52 billion, which was slightly below expectations. Still, revenue from Azure and other cloud services grew 29% during the quarter, with 8% of that growth coming from AI services.

Looking ahead, Microsoft estimates fiscal first-quarter revenue to come between $63.8 billion and $64.8 billion, implying 13.8% growth at the middle of the range. The company also sees Azure revenue growth between 28% and 29% at constant currency in the fiscal second quarter, with faster growth in the second half of the fiscal year, CFO Amy Hood said during the company's earnings call with analysts.

Advanced Micro Devices (AMD  ) also reported strong overall second-quarter earnings late Tuesday as demand for the company's AI chips continued to grow. The company's AI chip sales, part of its Data Center segment, rose 115% year-over-year to $2.8 billion.

CEO Lisa Su said on its call with analysts that AMD saw "higher than expected" sales of its AI chips, with revenue from its M1300 chips exceeding $1 billion in the second quarter. "As a result, we now expect data center GPU revenue to exceed $4.5 billion in 2024, up from the $4 billion we guided in April," Su told analysts.

For its third-quarter, AMD expects sales of about $6.7 billion, coming in above analysts forecasts.

Starbucks (SBUX  ) reported disappointing fiscal third-quarter revenue on Tuesday as demand for both its U.S. and international cafes weakened, with CEO Laxman Narasimhan calling the quarter's performance the result of a "challenging consumer environment." U.S. store traffic fell 6% during the quarter and same-store sales fell 2%, while China same-store sales fell 14% and international market same-store sales declined 7%.

Boeing (BA  ) on Wednesday reported a wider quarterly loss and weaker revenue than Wall Street expected on Wednesday as both its commercial airplane and defense programs were weighed down by the company's recent operation struggles. The company also announced it has hired aerospace industry veteran Robert "Kelly" Ortberg to become its next CEO, as Dave Calhoun is set to step down by the end of the year.

"Despite a challenging quarter, we are making substantial progress strengthening our quality management system and positioning our company for the future," Calhoun said in an earnings release on Wednesday.

Pinterest (PINS  ) shares dropped on Wednesday after the company reported weak forward guidance despite its second-quarter earnings beat. The social media platfrom had 522 million global monthly active users (MAU) for its second-quarter, topping estimates, while its global average revenue per user (ARPU) of $1.64 came in-line with expectations.

"Our monetization efforts are paying off," CEO Bill Ready said in a statement. "Advertisers are setting improved performance across key objectives on Pinterest -- from brand awareness to conversion -- as we continue to roll out AI powered products and experiences. As a result, we're gaining share of advertising budgets with some of the world's largest brands."

For its third-quarter, Pinterest expects sales to range from $885 million to $900 million, implying about 16% to 18% growth year-over-year, coming in below analyst projections for growth of about $907 million.

For Thursday:

Market participants will turn their attention toward earnings reports from companies like Meta Platforms (META  ), Qualcomm (QCOM  ), Arm Holdings (ARM  ), ConocoPhillips (COP  ), Toyota Motor (TM  ) and Shell PLC (SHEL  ).