Stocks fall sharply on Wall Street, led lower by tech stocks

A street sign is displayed at the New York Stock Exchange in New York, Monday, Nov. 23, 2020. Stocks are pulling back broadly in the early going on Wall Street, taking the S&P 500 further below the record high it reached just two days ago. The benchmark index was off 1.4% in the first few minutes of trading Wednesday, Jan. 27, 2021. (AP Photo/Seth Wenig)

Stocks were broadly lower in late-morning trading Wednesday, as investors focus on the Federal Reserve's policy meeting and the outlook for the economy as the coronavirus pandemic rages on.

The S&P 500 was down 1.7% as of 11:49 a.m. ET, dragged lower by technology stocks like Amazon and Facebook as well as materials and energy stocks. The Dow Jones Industrial Average was down 1.4%, while the Nasdaq composite was down 1.7%.

Investors are waiting to hear from the Federal Reserve at around 2 p.m. Eastern Time today. The Fed is expected to keep its extremely supportive policy stance unchanged given the slow progress in vanquishing the pandemic, analysts said.

Along with the Fed, this is the busiest week so far of quarterly earnings reporting season for U.S. companies. Apple and Facebook will report their quarterly results after Wednesday's closing bell.

More than 100 companies in the S&P 500 are scheduled to tell investors this week how they fared during the last three months of 2020. As a whole, analysts expect S&P 500 companies to say their fourth-quarter profit fell 5% from a year earlier. That’s a milder drop than the 9.4% they were forecasting earlier this month, according to FactSet.

Shares of GameStop soared 141%, as the video game retailer remains caught in a tug-of-war between Wall Street institutions and an activist community of mostly online investors. The online investors have bet that hedge funds have put too much money betting against the stock, a concept known as selling “short.” A pair of professional investment firms that placed big bets that GameStop’s stock would crash have largely abandoned their positions.

Boeing shares dropped 2.7% after the aircraft manufacturer posted its largest annual loss in the company's history, mostly due to the grounding of Boeing's 737-MAX fleet.

Markets have meandered since last week as investors weighed solid corporate earnings results against renewed worries that troubles with COVID-19 vaccine rollouts and the spread of new variants of coronavirus might delay a recovery from the pandemic.

The reality that President Joe Biden’s $1.9 billion stimulus package won’t be “rubber stamped” by the U.S. Senate is also weighing on sentiment, Jeffrey Halley of Oanda said in a report.

The fate of Biden's plan to send $1,400 to most Americans and deliver other support for the economy remains uncertain given the slim majority of the Democrats in the Senate. But on Tuesday, Senate Majority Leader Chuck Schumer said Democrats are prepared to push ahead with the relief package, even if it means using procedural tools to pass the legislation without Republicans.