Wall Street Mixed, but New Highs for the S&P 500 and Nasdaq

US markets closed mixed on Tuesday. The S&P 500 hit a new all-time high, rising +0.4%, while the Nasdaq Composite gained +0.9%. In contrast, the Dow Jones fell -0.8%. Futures are up this morning, fueled by anticipation of the Federal Reserve's decision.

Fed: Steady Rates Expected, but Political Pressure and Internal Divergences

The Federal Reserve will announce its monetary policy decision tonight after a two-day meeting. Markets expect with 97.2% probability that the key rate will be maintained within the 3.5%-3.75% range (CME FedWatch). However, Jerome Powell's press conference will be closely watched amid political uncertainty:

• Powell's term ends in May

• DoJ investigation into the Fed headquarters renovations

• Tensions with the executive branch over rates

• Pending Supreme Court decision on presidential powers versus the Fed

Several analysts, including Bankrate and Allianz Trade, foresee only one rate cut in 2026, while Citi predicts three.

Economy: Moderate Slowdown, Easing Inflation, Productivity Support

• The labor market remains solid but less tight: the jobs needed for market equilibrium have been revised downward (between 40K and 70K/month).

• Inflation remains above 2% but is not surging.

• Productivity increases, falling labor costs, and the impact of AI could give the Fed more leeway.

Bond & Commodity Markets

• 10-year yield: 4.25%

• 2-year yield: 3.58%

• 30-year yield: 4.86%

• Gold is now above $5,180, silver above $111, continuing their rally.

Expected Results Today

90 companies report their earnings, including:

• Microsoft (MSFT)
• Meta Platforms (META)
• Tesla (TSLA)
• ASML Holding (ASML)
• IBM
• ServiceNow (NOW)

Notable Movers

Biggest S&P 500 Gainers:

• Seagate Technology (STX) +10.82%

• F5 (FFIV) +10.24%

• Western Digital (WDC) +8.88%

Biggest S&P 500 Decliners:

• Skyworks Solutions (SWKS) -8.83%

• Quest Diagnostics (DGX) -3.98%

• Packaging Corp. of America (PKG) -2.96%

Key Results:

• Extreme Networks (EXTR): EPS $0.26 (+0.02 vs consensus), revenue $317.9M (+13.8% YoY)

• Seagate: revenue growth target of +34% YoY in Q1 thanks to HAMR adoption

• UMC: -9% in premarket after missing EPS expectations despite revenue growth

Analyst Recommendations (Selected)

Upgrades:

• Applied Materials (AMAT): Mizuho to "Outperform", target raised to $370

• KKR & Co. (KKR): HSBC to "Buy", target at $144

• Seagate (STX): Cantor Fitzgerald to "Overweight", target at $500

• Texas Instruments (TXN): Bernstein to "Market Perform", target at $205

Downgrades:

• Paypal (PYPL): Rothschild & Co Redburn to "Sell", target lowered to $50

• Roper Technologies (ROP): Stifel to "Hold", target reduced to $385

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To Watch Today

• Fed decision at 8pm (French time)

• Jerome Powell press conference

• Microsoft, Meta, and Tesla results

• Bond market reaction