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By Stephen Culp

NEW YORK (Reuters) –     Wall Street wavered on Wednesday, poised to snap a three-day rally as dour earnings guidance added to mounting fears of a global economic slowdown.

But those fears, along with a smaller-than-expected interest rate hike from the Bank of Canada, continued to feed hopes that the Fed might consider easing the size of its rate hikes after its Nov. 1-2 policy meeting.

“Central banks are starting to blink,” said Paul Kim, Chief Executive Officer at Simplify ETFs in New York. “It’s part of the larger trend and supports the (Fed) ‘pivot’ narrative.”

GRAPHIC: Central banks ramp up fight against inflation ht**://graphics.reuters.c**/EUROZONE-MARKETS/movakmlgxva/chart.png

The S&P 500 and the Nasdaq were last in negative territory, dragged lower by market-leading tech and tech-adjacent co*panies following results from Microsoft and Alphabet.

Microsoft and Alphabet shares were last down 6.0% and 8.0%, respectively.

Those gloomy reports brought worries over an impending global economic downturn from simmer to boil, and spread to other high profile megacaps, two of which – Apple Inc and Meta Platforms – are expected to post results after the closing bell.

Sales of newly constructed U.S. homes plunged in September while mortgage rates hit their highest level in more than two decades, adding to the growing pile of data suggesting a softening economic landscape.

At 2:13 p.m. (1813 GMT), the Dow Jones Industrial Average rose 160.68 points, or 0.5%, to 31,997.42, the S&P 500 lost 6.06 points, or 0.16%, to 3,853.05 and the Nasdaq co*posite dropped 145.97 points, or 1.3%, to 11,053.15.

Among the 11 major sectors of the S&P 500, co*munications services and tech were suffering the largest percentage losses.

Third quarter earnings season has shifted into high gear, with 170 of the co*panies in the S&P 500 having reported. Of those, 75% have delivered consensus-beating results, according to Refinitiv.

But they have a low bar to clear. Analysts now see aggregate S&P 500 earnings growth of 2.3%, down from 4.5% at the beginning of the month, per Refinitiv.

Among the initial takeaways so far this earnings season, Kim said “two themes are emerging: labor costs and dollar strength.”

“Dollar strength is a headwinds for larger co*panies with international revenues,” Kim added.

Boeing Co reported a deeper than expected third quarter loss, sending its shares sliding 7.9%.

On the plus side, Visa Inc rose 4.7% in the wake of the consumer credit co*pany’s profit beat.

Advancing issues outnumbered declining ones on the NYSE by a 2.97-to-1 ratio; on Nasdaq, a 2.20-to-1 ratio favored advancers.

The S&P 500 posted 25 new 52-week highs and 2 new lows; the Nasdaq co*posite recorded 87 new highs and 54 new lows.

(Reporting by Stephen Culp; Additional reporting by Amruta Khandekar and Shreyashi Sanyal in Bengaluru; editing by Grant McCool)