Wall Street inches lower as focus shifts to Fed's taper decision

US stocks indexes edged lower on Wednesday as investors looked ahead to the Federal Reserve's widely expected move to signal the withdrawal of its pandemic-era support, while Activision Blizzard slid on a gloomy outlook and a leadership change.

Five of the 11 major S&P sectors fell in early trading, with energy and industrials declining the most. Consumer discretionary shares outperformed. The banking sub-index was down 0.5%. The U.S. central bank will likely announce the tapering of its $120 billion-a-month asset purchase program in its policy statement due at 2 p.m. ET (1800 GMT).

"The taper is largely priced into markets right now, as the Fed has been telegraphing its intentions to taper for several months," said Danielle DiMartino Booth, CEO and chief strategist of Quill Intelligence in Dallas, Texas. The statement will be followed by Chair Jerome Powell's news conference, which market participants will be closely watching for views on inflation and path of interest rate hikes. "We don't expect they will touch up on their rate hike plans for now ... but, if the Fed is to cut bond buying at faster levels than what the market anticipates, it could send some jitters because it says that the Fed worries more about inflation," said Sam Stovall, chief investment strategist at CFRA Research in New York.

Wall Street has largely shrugged off concerns around rising price pressures and mixed economic growth, boosted by a stellar third-quarter earnings season and an upbeat commentary about growth going forward that drove U.S. stocks to record highs this week. Capri Holdings Ltd surged 13.0% after the Michael Kors owner raised its annual profit forecast above Wall Street estimates.

The outlook also boosted shares of Tapestry Inc by 5.6%. T-Mobile US gained 5.9% after the U.S. wireless carrier beat third-quarter estimates for adding monthly bill paying phone subscribers. Lyft Inc surged 9.0% after the ride-hailing firm reported an adjusted profit for the third quarter.

At 10:22 a.m. ET, the Dow Jones Industrial Average was down 114.93 points, or 0.32%, at 35,937.70, the S&P 500 was down 7.10 points, or 0.15%, at 4,623.55, and the Nasdaq Composite was up 7.36 points, or 0.05%, at 15,656.96. Meanwhile, data showed U.S. private employers maintained a solid pace of hiring in October, while a measure of U.S. services industry activity surged to a record high in October likely as declining COVID-19 cases boosted demand.

Activision Blizzard Inc tumbled 14.5% to weigh the most on the S&P 500 and Nasdaq after the videogame publisher delayed the launch of two much-awaited titles, as its co-leader Jen Oneal decided to step down from her role. Deere & Co slipped 4.9% as the tractor maker's workers were set to continue their three-week-old strike after they voted to reject a second contract.

Advancing issues outnumbered decliners by a 1.22-to-1 ratio on the NYSE and a 1.33-to-1 ratio on the Nasdaq. The S&P index recorded 34 new 52-week highs and three new lows, while the Nasdaq recorded 110 new highs and 30 new lows.