Market Mood Remains Cautious Ahead of Big Tech Earnings and Fed Decision
The stock market is experiencing a mixed morning, with the Nasdaq Composite down nearly 0.5% and the S&P 500 and Dow Jones Industrial Average trading relatively flat. This cautious mood is largely attributed to the impending Federal Reserve interest-rate decision and the first batch of Big Tech earnings.
Fed Policy Verdict Looms Large
Investors are eagerly awaiting Fed Chair Jerome Powell’s press conference, where he is expected to address two key questions: How much further will the Fed cut rates, and has the central bank changed its stance in light of President Trump’s early tariff moves? The Fed’s decision is expected to have a significant impact on the market, even though a rate hike is not anticipated.
Tech Stocks Get a Boost from ASML’s Surprise Rise
A surprise increase in bookings for ASML, a key toolmaker in the AI chip chain, has given tech stocks a much-needed boost. Shares of ASML surged 5% in early trading, with peers like Applied Materials also making gains. However, Nvidia’s shares fell nearly 3%, despite the positive news.
AI Spending and Costs Under Scrutiny
Markets are now taking a closer look at Chinese startup DeepSeek’s challenge to assumptions about AI spending and costs. Alibaba’s shares rose after the company released a new AI model that it claims is better than DeepSeek’s rival to ChatGPT. Meanwhile, Microsoft-backed OpenAI has accused DeepSeek of using its proprietary models to train its competitor.
Earnings Season Heats Up
The spotlight is now on the guidance in Meta and Microsoft’s quarterly results, due after the bell, for reassurance that Big Tech’s heavy AI spending will pay off in growth. Tesla rounds out Wednesday’s megacap earnings, with Wall Street watching for a new catalyst to jump-start the stock.
ASML’s Strong Earnings Report
ASML’s stock rose 6% early Wednesday after the Dutch semiconductor equipment company posted better-than-expected fourth-quarter earnings. The company’s CEO dismissed concerns that DeepSeek’s breakthrough would hurt demand for AI chips, stating that it sees the development as an opportunity for more chip demand.
Trump Media & Technology Group Expands into Financial Services
Trump Media & Technology Group shares rose nearly 15% in pre-market trading after the company announced an expansion into financial services. The operator of Truth Social will launch a financial services and fintech brand dubbed “Truth.Fi,” with a $250 million investment in customized separately managed accounts, exchange-traded funds, and cryptocurrencies.
Apple’s Rating Cut Ahead of Earnings
Oppenheimer has joined its peers at Loop Capital and Jefferies in cutting its rating on shares of Apple ahead of the company’s fiscal first-quarter results. The firm cited slowing iPhone sales and a lack of AI innovation, similar to cases made by Loop and Jefferies last week.
Economic Data and Earnings Schedule
Today’s economic data includes MBA Mortgage Applications, while the FOMC rate decision is also expected. Earnings reports are due from Tesla, Meta, Microsoft, ADP, ASML, General Dynamics, IBM, Nasdaq, Progressive, ServiceNow, T-Mobile, and V.F. Corporation.
Leave a Reply