Stock Market Recap: S&P 500 Dips as Fed Holds Rates Steady, Tech Giants in Focus
The U.S. stock market closed lower on Wednesday, January 29, 2025, as investors digested the Federal Reserve’s latest policy decision and a flurry of high-profile earnings reports. The S&P 500 ended the day down 0.47% at 6,039.31, while the Dow Jones Industrial Average slipped 0.31% to 44,713.52. The tech-heavy Nasdaq Composite fell 0.51% to 19,632.32.
Fed Holds Rates Steady, Powell’s Comments in Focus
The Federal Reserve, as widely expected, kept its benchmark interest rate unchanged at a target range of 4.25% to 4.5%. This decision marks a pause in the rate-cutting cycle that began in September 2024. Investors are now eagerly awaiting Fed Chair Jerome Powell’s press conference, his first in President Donald Trump’s second term, for clues on the future path of monetary policy.
Tech Giants Report Earnings
After the closing bell, several tech behemoths are set to report their quarterly earnings, including:
– Microsoft Corporation (MSFT): Analysts expect earnings per share of $3.11, representing a 6.14% increase year-over-year.
– Meta Platforms, Inc. (META): The consensus forecast is $6.68 per share, a 25.33% jump from the same quarter last year.
– Tesla, Inc. (TSLA): Expectations are set at $0.62 per share, an 8.77% increase from the previous year.
These reports could significantly impact market sentiment in the coming days, particularly in the tech sector.
Nvidia’s Rollercoaster Week Continues
Nvidia Corporation (NVDA), the AI darling of Wall Street, saw its shares drop 3% on Wednesday, adding to an already volatile week. This follows a dramatic 17% plunge on Monday, which erased about $593 billion from its market value – the largest single-session loss for any company in Wall Street history. The selloff was triggered by news of a Chinese AI startup, DeepSeek, developing a sophisticated AI model that can compete with leading American models at a fraction of the cost.
Other Notable Stock Movements
– F5, Inc. (FFIV) surged 11.40% after the application security company’s fiscal second-quarter outlook beat Wall Street’s expectations.
– Nextracker Inc. (NXT) soared 24.28% following strong revenue results and better-than-expected earnings guidance.
– ASML Holding N.V. (ASML) rose 5% in U.S. trading after reporting a 169% jump in fourth-quarter net bookings, signaling robust demand for its chipmaking tools.
– Apple Inc. (AAPL) shares were down nearly 2% in premarket trading, retreating from two days of solid gains.
Market Outlook and Upcoming Events
As January draws to a close, the major indexes are all near record highs and on pace to post gains for the month. The Dow is up 5.4% so far in January, while the S&P 500 and Nasdaq have gained 3.2% and 2.2%, respectively.
However, some market analysts are cautioning about potential headwinds in the second half of 2025. Point72’s Steve Cohen warned that President Trump’s aggressive trade and immigration policies could slow economic growth, potentially causing markets to top out in the coming months.
Looking Ahead
Investors will be closely monitoring the following factors in the coming days:
1. The outcome of the Fed’s policy meeting and Jerome Powell’s press conference
2. Earnings reports from tech giants and their impact on market sentiment
3. Ongoing developments in the AI sector, particularly the competition between U.S. and Chinese companies
4. Economic data releases, including GDP growth and inflation figures
As always, market participants are advised to stay informed and maintain a diversified portfolio to navigate potential volatility in the months ahead.
