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
To Watch Today
- Fed decision at 8pm (French time)
- Jerome Powell press conference
- Microsoft, Meta, and Tesla results
- Bond market reaction
