Stocks fell while short-term bond yields climbed, although both movements were tempered after initial worries about the Federal Reserve’s increasing anxiety over inflation were soothed by Chair Jerome Powell.
In the late trading session, a $328 billion exchange-traded fund linked to the Nasdaq 100 (QQQ) experienced significant fluctuations. Tesla Inc. saw its shared rise after announcing expectations for increased vehicle sales this year following a thorough 2024.
Meta Platforms Inc. increased as its CEO offered an optimistic forecast. International Business Machines Corp. increased after revealing strong revenue growth projections and a notable increase in AI-related bookings.
Conversely, Microsoft Corp. experienced a decline as its cloud-computing sector showed signs of slowing growth. The Federal Open Market Committee decided to maintain the federal funds rate within the 4.25%- 4.5% range.
In their statement, official mentioned that inflation remains somewhat elevated by omitting a mention of progress toward their 2% target. Later, Powell clarified that the change regarding inflation was merely a simplification of the statement and is now an indication of any significant shift.
The author of the Boock Report remarked, “Forget it, Jay Powell indicated in his press conference that the adjustments in comments about the labor market and inflation in the FOMC statement should not be seen as a signal.”
Krishna Guha at Evercore noted that Powell’s press conference felt less hawkish as compared to the updates in the statement. The yield on two-year Treasuries increased by two basis points to 4.21%.
Earlier this week, the tech sector faced major volatility amid concerns about an affordable artificial intelligence model from the Chinese startup DeepSeek. It could challenge the valuations of the technology that has driven the bull market.
This recent turbulence among tech giants has raised alarms on Wall Street, especially as the S&P 500’s leadership has not been this concentrated in over two decades.
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