Economic reports—GDP and private payroll data—should trump the U.S. Federal Reserve's meeting Wednesday, unless there's an unlikely move by the Fed to change its message.
First quarter GDP was way below estimates - 0.1 percent versus the 1.2 percent expected by economists. ADP's payroll report for April came in at 220,000, slightly better than expected.
The Fed ends its two-day meeting with its 2 p.m. ET statement, and it is expected to announce it will pare back its quantitative easing, bond buying program by another $10 to $45 billion a month.
"Unfortunately, it should be pretty dull. We think they'll do some straight forward updating of the statement to reflect that some of the economic data has improved since the weather normalized, but that's about it," said Barclays chief U.S. economist Dean Maki. "We don't think they'll change any of the policy paragraphs or give any new signals on tapering. We think they'll taper the $10 billion as expected."
The Fed is likely to discuss its statement, the economy and the conditions that might lead it to raise short term interest rates. Maki said the minutes of the meeting will ultimately be more interesting when released next month.
"That will probably be more interesting because they'll be talking contingencies and that kind of stuff," he said. "We know they'll be talking about slack and how much slack there is…Some people think there's lots of slack. Some people think there's not that much slack. The tricky thing about the minutes is you never know which sentence the market will seize on."
But the data the Fed will review during its meeting Wednesday also interests markets. First quarter GDP was released at 8:30 a.m. ET, and economists expect the near zero growth could temper some of the Fed's comments ont he economy. But the ADP number is for April, reflecting the current quarter, and it was the second 200,000 plus report in a row, suggesting an improving employment trend.
Inventories and the impact of the Affordable Care Act were two wild cards economists were watching in the GDP number. Inventories were elevated and economists have been talking about a resulting payback in first quarter.
"We've got an inventory drain. The way the numbers are adding up is pretty much around the 1 percent range. It's weather related losses," said Diane Swonk, chief economist at Mesirow Financia, before the number was released. "We had a lot of disruptions. We didn't get the improvement in car sales until March. They were pretty weak in February. A lot of consumer-related weakness was related to the weather."
The change in private inventories subtracted 0.6 percent from growth, potentially a positive for the second quarter as businesses increase output to meet demand. Business spending fell at a 2.1 percent pace in the first quarter, the first decline in a year and a disappointment after the fourth quarter's 5.7 percent gain.
Swonk expected a pickup in health care spending, as more consumers spent on premiums for Affordable Care Act health care policies. That did show up in the number, with consumer spending gaining 3 percent and it was largely driven by health care and spending on utilities.
Maki had expected the inventory slowdown to be smaller than others forecast, and he had forecast 2 percent GDP for first quarter. "The final sales part, the consumption part should be the most important regardless of whatever the headline number prints," he said.
Maki forecast second quarter growth at 3 percent, though Swonk, with the weaker 1 percent first quarter forecast, expects it to jump to 3.8 percent. "This is a big roller coaster ride," she said. Fourth quarter growth was 2.6 percent.
LPL Financial strategist John Canally said he doesn't expect much from the Fed since it has no press briefing following the meeting.
"There's so much work to be done on that statement that they're not likely to spring it on us at a meeting where they have no other communication," he said.
"The Fed is not too worried about inflation and not too happy with job growth. If they continue to say that, the market is not going to care much," he said. "I don't think they can afford to make another misstep." He was referencing a comment made by Fed Chair Janet Yellen at her first press briefing about when the Fed could begin to raise rates. The markets took her remark to suggest that the Fed could raise rates six months after it ends quantitative easing literally, and Fed officials have spent a lot of effort to change that view.
Market focus Wednesday will also be on earnings, after Twitter's wider loss and 10 percent stock decline Tuesday. Dozens of earnings are expected before the bell, including Time Warner, GlaxoSmithKline, Royal Dutch Shell, Daimler, Thomson Reuters, WellPoint Health, Carlyle Group, Pitney Bowes, Sealed Air, Total, Exelon, Hess, Actavis, International Paper, and MeadWestvaco.
After the bell reports are expected from Boston Beer, Yelp, Shutterfly, MetLife, Williams Cos, Weight Watchers, WebMD Health, Flextronics, Cabot, Curtiss-Wright, Pilgrim's Pride, Terex, Ternium, JDS Uniphase, General Cable, Tesoro Logistics and Tesoro.
—By CNBC's Patti Domm. Follow her on Twitter @pattidomm.