Latest news with #post-FOMC
Yahoo
16 hours ago
- Business
- Yahoo
Fiscal Jitters Return to Treasuries as Middle East Risks Ease
(Bloomberg) -- Bond investors are shifting their focus back to troubling questions about US fiscal risks, after a ceasefire between Israel and Iran cleared a stormcloud hanging over global markets. Bezos Wedding Draws Protests, Soul-Searching Over Tourism in Venice US State Budget Wounds Intensify From Trump, DOGE Policy Shifts Taxi Wars Put Johannesburg Commuters in Peril as Rail Flounders President Donald Trump's announcement of a ceasefire in the Middle East led to clear moves across markets on Tuesday, pushing stocks and risk-sensitive currencies like the Australian dollar higher while gold and the dollar fell. One outlier: Treasury yields, which barely budged as investors turned their attention back to a series of conflicting signals coming from the world's largest economy. 'De-escalation in the Middle East has eased near-term inflation concerns, but uncertainty from tariff risks and fiscal policy still lingers,' said Charu Chanana, chief investment strategist at Saxo Markets. The sense of uncertainty in the Treasury market underscores the dizzying calculations investors are being forced to make as they try to game out the impact of tariffs and the potential path for interest rates. Trump's proposed 'big beautiful bill', which is nearing a vote in the Senate, has added to concerns about the US fiscal deficit, while the trade war has fueled worries about inflation — both factors that should put upward pressure on yields. But some Federal Reserve officials are ramping up talk about sooner-than-expected rate cuts, which should pull yields lower. The net result: a holding pattern. US 10-year yields edged lower to 4.33% in Asian trading Tuesday, while 30-year yields declined a basis point to 4.86%. 'Investors are balancing concerns of higher inflation and a potential downturn, both stemming from a tariff policy that continues to evolve,' wrote Tim Ng, fixed income portfolio manager at Capital Group, which oversees more than $2.8 trillion. Watch Long Bonds Bond traders are likely to keep their focus on the long-end of the curve, said Chanana, adding that longer tenor bonds are particularly vulnerable to fiscal stress, the budget reconciliation bill and tensions between Trump and Fed Chair Jerome Powell, who the president has criticized for not cutting interest rates. More immediately, investors will be scrutinizing Powell's testimony at the House Financial Services Committee on Tuesday, a chance for the market to get fresh clues on the direction of monetary policy. What Bloomberg Strategists Say... There's a strong chance Powell reiterates his post-FOMC comments that tariffs will have an impact at some stage this summer. Meaning the path for rates will remain unclear until policymakers get to see what the effect of the levies turns out to be. Garfield Reynolds, Markets Live strategist Higher yields mean funding pressure at a time when the US is borrowing more and government spending remains rampant. US 30-year yields touched an almost two-decade high of 5.15% last month. And as yields whipsaw, strategists warn some of the traditional anchors that once made Treasuries a bedrock of global bond portfolios are now looking increasingly fragile. 'The risk is that there's going to be a movement higher in yields on some sort of inflation shock or resetting of the outlook for the fiscal position in the US,' said Kerry Craig, global market strategist at JPMorgan Asset Management. Luxury Counterfeiters Keep Outsmarting the Makers of $10,000 Handbags Is Mark Cuban the Loudmouth Billionaire that Democrats Need for 2028? Ken Griffin on Trump, Harvard and Why Novice Investors Won't Beat the Pros Can 'MAMUWT' Be to Musk What 'TACO' Is to Trump? What Mike Tyson and the Bond Market Can Teach Trump on Debt ©2025 Bloomberg L.P.
Mint
16 hours ago
- Business
- Mint
Fiscal Jitters Return to Treasuries as Middle East Risks Ease
(Bloomberg) -- Bond investors are shifting their focus back to troubling questions about US fiscal risks, after a ceasefire between Israel and Iran cleared a stormcloud hanging over global markets. President Donald Trump's announcement of a ceasefire in the Middle East led to clear moves across markets on Tuesday, pushing stocks and risk-sensitive currencies like the Australian dollar higher while gold and the dollar fell. One outlier: Treasury yields, which barely budged as investors turned their attention back to a series of conflicting signals coming from the world's largest economy. 'De-escalation in the Middle East has eased near-term inflation concerns, but uncertainty from tariff risks and fiscal policy still lingers,' said Charu Chanana, chief investment strategist at Saxo Markets. The sense of uncertainty in the Treasury market underscores the dizzying calculations investors are being forced to make as they try to game out the impact of tariffs and the potential path for interest rates. Trump's proposed 'big beautiful bill', which is nearing a vote in the Senate, has added to concerns about the US fiscal deficit, while the trade war has fueled worries about inflation — both factors that should put upward pressure on yields. But some Federal Reserve officials are ramping up talk about sooner-than-expected rate cuts, which should pull yields lower. The net result: a holding pattern. US 10-year yields edged lower to 4.33% in Asian trading Tuesday, while 30-year yields declined a basis point to 4.86%. 'Investors are balancing concerns of higher inflation and a potential downturn, both stemming from a tariff policy that continues to evolve,' wrote Tim Ng, fixed income portfolio manager at Capital Group, which oversees more than $2.8 trillion. Bond traders are likely to keep their focus on the long-end of the curve, said Chanana, adding that longer tenor bonds are particularly vulnerable to fiscal stress, the budget reconciliation bill and tensions between Trump and Fed Chair Jerome Powell, who the president has criticized for not cutting interest rates. More immediately, investors will be scrutinizing Powell's testimony at the House Financial Services Committee on Tuesday, a chance for the market to get fresh clues on the direction of monetary policy. What Bloomberg Strategists Say... There's a strong chance Powell reiterates his post-FOMC comments that tariffs will have an impact at some stage this summer. Meaning the path for rates will remain unclear until policymakers get to see what the effect of the levies turns out to be. Garfield Reynolds, Markets Live strategist Higher yields mean funding pressure at a time when the US is borrowing more and government spending remains rampant. US 30-year yields touched an almost two-decade high of 5.15% last month. And as yields whipsaw, strategists warn some of the traditional anchors that once made Treasuries a bedrock of global bond portfolios are now looking increasingly fragile. 'The risk is that there's going to be a movement higher in yields on some sort of inflation shock or resetting of the outlook for the fiscal position in the US,' said Kerry Craig, global market strategist at JPMorgan Asset Management. More stories like this are available on
Reuters
09-04-2025
- Business
- Reuters
Fed minutes show some debate over balance sheet runoff slowdown
April 9 (Reuters) - The Federal Reserve's decision to dramatically slow the pace of its balance sheet drawdown last month was supported by nearly all participants at the two-day meeting, but several participants did not see a compelling case for such a move, according to minutes of the meeting released on Wednesday. The decision followed a briefing by the New York Fed's system open account manager, which laid out the case for slowing the runoff while there was uncertainty over how soon Congress would raise the federal debt ceiling. "The manager noted that either pausing or sufficiently slowing runoff would provide meaningful insurance" against the possibility of reserves dropping quickly after a debt ceiling resolution is reached. At that March 18-19 policy meeting, the central bank said that it would lower the cap on how many Treasury securities it would allow to run off from the previous $25 billion per month to $5 billion as of this month, while preserving the $35 billion cap on the mortgage bond drawdown it has already struggled to meet. The deceleration in what's called quantitative tightening, or QT, had been widely expected. The near pause in the pace of QT allows the Fed to navigate a period of money market uncertainty due to government cash management issues amid a period of legally limited borrowing. The QT slowdown was opposed by Fed Governor Christopher Waller, who has often been skeptical of using the Fed's securities holdings as a policy tool. The Fed's goal with QT has been to withdraw enough liquidity from the financial system to allow for normal short-term interest rate volatility and to maintain firm control over the federal funds rate, the central bank's chief lever to influence the economy. Officials are looking to markets for signals about how much liquidity they can safely take out but as the Treasury wrestles with the debt ceiling those signals are obscured. Without the debt ceiling issue, the Fed would likely be full steam ahead on QT. Speaking last month after the FOMC meeting, Fed Chair Jerome Powell said market indications are that 'the quantity of reserves remains abundant.' The debt limit issue, absent some immediate action from Congress, is likely to remain in place for some time. Last month the Congressional Budget Office said the government's means to manage cash while borrowing is capped will be exhausted by August or September. EXTENDED SLOWDOWN Powell appeared to argue at the post-FOMC meeting press conference that the reduced pace of QT is the new normal even after Congress lifts the debt ceiling because it allows for a more gradual approach to the point where QT would need to stop. 'If you're cutting the pace of QT roughly in half, then the runway is probably doubled,' something that he said appealed to Fed policymakers. 'It's a common-sense kind of a thing,' he added. New York Fed President John Williams, speaking on Yahoo Finance on March 31, also saw longer-run value in the slower QT pace. As the end point looms eventually, 'we're coming in at a slower speed and we can collect data, understand what's going on and avoid any unnecessary bumps along the way.' Fed officials have said repeatedly that what happens with QT stands apart from the main thrust of monetary policy, which is tied to the level of the federal funds rate. The drawdown of the Fed's balance sheet has taken central bank holdings from a peak of $9 trillion in 2022 to the current level of $6.8 trillion. For some time, there's been little clarity on how far the Fed can take the QT process. A recent note from Goldman Sachs economists pegged the endpoint at some time in the third quarter of this year. Meanwhile, Morgan Stanley forecasters predicted QT could extend into next year now that the rundown has slowed. One wrinkle for the QT outlook is the increasing stress faced by financial markets as President Donald Trump pursues an aggressive trade war against almost all of America's major trading partners. His tariff regime and the uncertainty surrounding it have driven deep losses in stocks and, in the view of many economists, are putting the U.S. and other large nations on track for big economic downturns. That's driving markets to price in more Fed rate cuts. While the Fed is some way from the ultra-low rates that have in the past forced it to buy bonds as a form of stimulus, it's possible an aggressive cutting scenario may again shift the outlook for Fed holdings and suggest a return to large-scale buying.
Yahoo
09-04-2025
- Business
- Yahoo
Fed minutes show some debate over balance sheet runoff slowdown
By Michael S. Derby (Reuters) - The Federal Reserve's decision to dramatically slow the pace of its balance sheet drawdown last month was supported by nearly all participants at the two-day meeting, but several participants did not see a compelling case for such a move, according to minutes of the meeting released on Wednesday. The decision followed a briefing by the New York Fed's system open account manager, which laid out the case for slowing the runoff while there was uncertainty over how soon Congress would raise the federal debt ceiling. "The manager noted that either pausing or sufficiently slowing runoff would provide meaningful insurance" against the possibility of reserves dropping quickly after a debt ceiling resolution is reached. At that March 18-19 policy meeting, the central bank said that it would lower the cap on how many Treasury securities it would allow to run off from the previous $25 billion per month to $5 billion as of this month, while preserving the $35 billion cap on the mortgage bond drawdown it has already struggled to meet. The deceleration in what's called quantitative tightening, or QT, had been widely expected. The near pause in the pace of QT allows the Fed to navigate a period of money market uncertainty due to government cash management issues amid a period of legally limited borrowing. The QT slowdown was opposed by Fed Governor Christopher Waller, who has often been skeptical of using the Fed's securities holdings as a policy tool. The Fed's goal with QT has been to withdraw enough liquidity from the financial system to allow for normal short-term interest rate volatility and to maintain firm control over the federal funds rate, the central bank's chief lever to influence the economy. Officials are looking to markets for signals about how much liquidity they can safely take out but as the Treasury wrestles with the debt ceiling those signals are obscured. Without the debt ceiling issue, the Fed would likely be full steam ahead on QT. Speaking last month after the FOMC meeting, Fed Chair Jerome Powell said market indications are that 'the quantity of reserves remains abundant.' The debt limit issue, absent some immediate action from Congress, is likely to remain in place for some time. Last month the Congressional Budget Office said the government's means to manage cash while borrowing is capped will be exhausted by August or September. EXTENDED SLOWDOWN Powell appeared to argue at the post-FOMC meeting press conference that the reduced pace of QT is the new normal even after Congress lifts the debt ceiling because it allows for a more gradual approach to the point where QT would need to stop. 'If you're cutting the pace of QT roughly in half, then the runway is probably doubled,' something that he said appealed to Fed policymakers. 'It's a common-sense kind of a thing,' he added. New York Fed President John Williams, speaking on Yahoo Finance on March 31, also saw longer-run value in the slower QT pace. As the end point looms eventually, 'we're coming in at a slower speed and we can collect data, understand what's going on and avoid any unnecessary bumps along the way.' Fed officials have said repeatedly that what happens with QT stands apart from the main thrust of monetary policy, which is tied to the level of the federal funds rate. The drawdown of the Fed's balance sheet has taken central bank holdings from a peak of $9 trillion in 2022 to the current level of $6.8 trillion. For some time, there's been little clarity on how far the Fed can take the QT process. A recent note from Goldman Sachs economists pegged the endpoint at some time in the third quarter of this year. Meanwhile, Morgan Stanley forecasters predicted QT could extend into next year now that the rundown has slowed. One wrinkle for the QT outlook is the increasing stress faced by financial markets as President Donald Trump pursues an aggressive trade war against almost all of America's major trading partners. His tariff regime and the uncertainty surrounding it have driven deep losses in stocks and, in the view of many economists, are putting the U.S. and other large nations on track for big economic downturns. That's driving markets to price in more Fed rate cuts. While the Fed is some way from the ultra-low rates that have in the past forced it to buy bonds as a form of stimulus, it's possible an aggressive cutting scenario may again shift the outlook for Fed holdings and suggest a return to large-scale buying.
Yahoo
19-03-2025
- Business
- Yahoo
Stock market today: Dow, S&P 500, Nasdaq trade higher as Fed holds rates steady
US stocks remained higher on Wednesday as the Federal Reserve held interest rates steady, as expected, while the central bank also raised its forecast for inflation, cut its forecast for economic growth, and kept interest rate cut projections unchanged for this year as the economy deals with the uncertainty of tariff risks this year. The Dow Jones Industrial Average (^DJI) was up about 0.4%, while the S&P 500 (^GSPC) rose about 0.6%. The tech-heavy Nasdaq Composite (^IXIC) led the gains with a rise of more than 0.9% following Wednesday's announcement as the major gauges looked to recover from another sell-off on Tuesday. Investors will now look to Fed Chair Jerome Powell to provide a catalyst as stocks attempt to recover from their recent sharp sell-off. With rate cuts seen as off the table for March, the focus was on the "dot plot" — where Fed officials think rates will move next — and on Chair Jerome Powell's press conference to set expectations for future easing. Wednesday's announcement revealed few changes from December's outlook, with 9 Fed officials looking for two interest rate cuts this year while 8 see there likely being only 1 rate cut or less this year. "Powell post-FOMC will have to reassure markets growth remains healthy and inflation's trajectory still points to 2% as confidence is wavering amid stagflation worries, or outright recession fears," Evercore ISI's Julian Emanuel said in a note to clients. Read more: The latest on Trump's tariffs In high focus is the Fed's view of how Trump's trade, immigration, and other policies will impact the economy — inflation and the labor market in particular. It comes as investors increasingly worry about US growth. In individual names, Nvidia (NVDA) stock rose more than 2%, set to recoup some of Tuesday's tech-rout losses as GTC-linked headlines rolled in. Meanwhile, Tesla (TSLA) shares also rebounded by more than 4% as Cantor Fitzgerald upgraded the stock to a "Buy" rating. The liveliest debate in markets right now is how much stocks, policymakers, businesses, and economic forecasters are reacting — or should be reacting — to Trump's tariffs. And though the Federal Reserve is often the most patient constituent among these groups when it comes to reshaping their current framework, Wednesday's announcement from the Fed makes clear they are not ignoring what the president is doing on trade policy. "Uncertainty around the economic outlook has increased," the Fed said in its statement. "The Committee is attentive to the risks to both sides of its dual mandate." In Fedspeak terms, these are firm statements: the central bank is attuned to the risks of tariff policies and will not hesitate to build them into its forecasts. Along with keeping interest rates steady and still forecasting two rate cuts in 2025, the Fed released forecasts for notably lower GDP growth and higher inflation this year. GDP growth is now expected to be 1.7% in December, down from 2.1% in the Fed's forecasts published in Dec. 2024. Core inflation is now set to stand at 2.8% at the end of the year, up from an earlier forecast for 2.5%. The Fed targets 2% inflation, on average. How these revisions — which essentially outlines the contours of an economy showing some stagflationary tendencies — still back the case for two rate cuts this year will be the main topic of Fed Chair Powell's press conference in about 20 minutes. But we'd note, those "dot plot" projections aren't as clean as "two cuts" may sound — 4 Fed officials think only 1 cut will be needed; 4 others see there being no need to cut rates. The Federal Reserve held interest rates steady in a range of 4.25% to 4.5%. The central bank also released its latest Summary of Economic Projections (SEP), including its "dot plot," which maps out policymakers' expectations for where interest rates could be headed in the future. The median official's forecast for the federal funds rate at the end of 2025 was 3.9%, which would likely represent two 25 basis points cuts this year. As part of the Fed's SEP, officials marked up their projections for core inflation and lowered their forecast for economic growth in 2025. The Fed now also sees the unemployment rate moving to 4.3% from a prior forecast of 4.2%. Stocks are off their highs of the day less than an hour before the Federal Reserve is set to release its latest monetary policy decision. The Dow Jones Industrial Average (^DJI) was up about 0.4%, while the S&P 500 (^GSPC) rose about 0.5%. The tech-heavy Nasdaq Composite (^IXIC) led the gains with a rise of more than 0.7% after the major gauges failed to muster a comeback on Tuesday. Energy (XLE) was the leading sector in the S&P 500 on the day, rising about 1.4%. The 10-year Treasury yield (^TNX) hovered near 4.31%. Yahoo Finance's Brooke DiPalma reports: General Mills (GIS) is in for a tough 2025 as it tries to sell its lineup of cereals and snacks. The Cheerios maker reported earnings on Wednesday that included lower guidance. It expects organic net sales to drop 2% to 1.5% for the year, compared to the previous range of flat to up 1%. "Coming into this year, we thought the consumer environment would improve as the year [goes] on, and that hasn't really been the case," CEO Jeffrey Harmening said on its earnings call. General Mills stock fell 2% in morning trading and is down 7% year to date. Read more here. The Fed decision is slated for release at 2 p.m. ET. Given the central bank is widely expected to hold interest rates steady, investors will be closely watching the Fed's Summary of Economic Projections (SEP). The consensus belief is that Fed policymakers are likely to continue to project two interest-rate cuts this year, in line with market pricing. Meanwhile, they're seen as lowering their forecast for economic growth and revising their inflation projection higher. This, Charles Schwab chief fixed income strategist Kathy Jones said, could pose a risk to markets if the Fed's median projection falls short of two rate cuts. Jones described a median projection of one interest rate cut as a "potential disappointment for markets." Tesla stock (TSLA) is up nearly 4% after a bullish upgrade from Cantor Fitzgerald. Following a recent factory visit, analyst Andres Sheppard wrote that the recent massive downdraft in Tesla shares represented an 'attractive entry point for investors.' He sees the company's autonomous ride-hailing effort in Austin as a likely catalyst for the stock, alongside Full Self-Driving rollouts in China and Europe. Sheppard upgraded the shares to Overweight from Neutral and maintained his $425 price target. That said, the analyst acknowledged that headwinds remained — like Trump tariffs, the likely loss of EV tax credits, and even CEO Elon Musk's political forays. 'We also expect a mild 1Q, driven by lower demand in Europe and increased competition in China, plus some negative sentiment from Elon's polarizing politics,' Sheppard said. Cantor Fitzgerald's Tesla upgrade comes after its former chairman and CEO Howard Lutnick left the firm to become US Commerce Secretary, working alongside DOGE leader Elon Musk at the White House. Though Lutnick stepped down and claims to no longer control Cantor Fitzgerald, he appointed his sons Brandon and Kyle as chairman and executive vice chairman, respectively. Apartment hunters caught a break in February as rents continued their nationwide decline. Data from shows that rents dropped to $1,691 last month, slightly lower than in January and down by $15 compared to February 2024. This marks the 19th straight month of year-over-year declines. Rents have been trending downward for well over a year and a half since the pandemic run-up, but renters are still paying considerably more than they did before. noted that the national rent is 14.4% higher than it was five years ago. Despite the gradual drop in rents, multifamily housing has become less attractive to investors over the past few years. This has led to lower rental unit inventory for the future, which could push rents higher, according to senior economist Joel Berner. Last year, less than 294,000 units in multifamily rentals were authorized for construction across the 50 largest metros, reaching the lowest level since 2017. Berner projects that if the supply of new rental units continues to shrink, the downward trend of rent prices will not hold. "We expect rents to start to grow again in the coming years as the pace of new units hitting the market slows," Berner warned. Boeing (BA) shares added more than 6% after CFO Brian West provided an upbeat update on the company's business on Wednesday morning. The planemaker's cash burn this year is expected to be "hundreds of millions" of dollars lower than previously thought, West said at a Bank of America investor conference. 'We think we're off to a good start for the year,' the finance chief said. Roku (ROKU) shares rose 10% in early trading following news that Trump Media & Technology Group (DJT), the parent company of President Trump's social media platform Truth Social, has partnered with the tech and hardware company to launch a new app. Trump Media, which also operates the fintech brand and streaming platform Truth+, said Wednesday it launched a Roku TV-specific app for users to access the Truth+ platform. "Now available in the Roku Channel Store, Truth+ offers family-friendly TV programming for patriotic Americans who want an alternative to woke entertainment corporations and biased news channels," the company said in a press release. Roku TV owners can download the Truth+ app directly from the Roku Channel Store to their TV sets. In the future, the company plans to introduce Truth+ native apps for additional connected TV platforms, including Samsung and LG. "We're bringing Truth+ to Roku and planning to release more TV apps soon," Trump Media CEO and Chairman Devin Nunes said. "Truth+ is the singular option for non-woke TV and movies, as well as a great alternative to discredited legacy news channels that have squandered the trust of the American people." DJT shares rose 3% on the news, although the stock has fallen nearly 40% since the start of the year and is currently trading near the low end of its 52-week range. Stocks moved slightly higher at the open of US trading on Wednesday. The Dow Jones Industrial Average (^DJI) was up about 0.2%, while the S&P 500 (^GSPC) rose about 0.3%. The tech-heavy Nasdaq Composite (^IXIC) led the gains with a rise of nearly 0.6%, after the major gauges failed to muster a comeback on Tuesday with tech leading the way down. Markets are expected to be in wait-and-see mode throughout the trading session ahead of the Federal Reserve's policy announcement at 2 p.m. ET, followed by Chair Jerome Powell's press conference about 30 minutes later. Turkish financial markets plunged after police there arrested Istanbul's mayor, the main rival to President Erdoğan in Turkey's next election. Stocks on Turkey's benchmark index dropped so fast that it triggered a trading halt, while its currency, the lira, tumbled over 10% to a record low against the dollar at one point. The signs of a political purge spooked investors focused on the prospects for Turkey's recent market-friendly policies. Bloomberg reports: Read more here. Tesla (TSLA): Shares in the electric vehicle maker bounced back by 3% in premarket trading after the stock sold off Tuesday on new competitive pressures from Chinese rivals BYD, Xiaomi, and XPeng. Tesla stock has provided a windfall for short sellers this year, as it's down over 44% since the start of 2025. Also on Wednesday, Howard Lutnick's Cantor Fitzgerald upgraded Tesla shares to a Buy rating, writing that the recent sell-off 'represents an attractive entry point for investors.' Strategy (MSTR): The bitcoin holder formerly known as MicroStrategy rose 1.9% in early trading and looks poised to stage a comeback from yesterday's sell-off. The Michael Saylor-run firm said it would be selling stock to buy more bitcoin on Tuesday, sending mixed signals to investors. General Mills (GIS): Shares in the maker of Pillsbury and Cheerios fell nearly 4% premarket after General Mills forecast a sharp decline in annual sales and profit Wednesday morning. Consumers switching to private-label brands has hit the cereal and snack maker particularly hard. Intel (INTC): Intel stock slipped premarket in a week where investors weighed incoming CEO Lip-Bu Tan's AI plan to turn the ailing chipmaker's business around. Shares are off by 2.5% after a five-day winning streak. Wall Street is convinced the Fed won't make any move on interest rates today, given the risk of Trump's tariffs hitting the economy. "Uncertainty" is the watchword it expects to hear. "Fed Chair Powell is probably going to say that over and over," Wilmington Trust portfolio manager Wil Stith said. Investors are focused instead on the 2 p.m. ET release of the Fed's quarterly forecasts — otherwise known as the Summary of Economic Projections (SEP) — for any clues to the path forward, Yahoo Finance's Jennifer Schonberger reports. Read more here. Nvidia (NVDA) shares turned slightly higher in premarket trading, up about 1% as investors digested a stream of news from the chipmaker's annual GTC event. The highlight: the next-gen Blackwell Ultra chip, unveiled by CEO Jensen Huang in his keynote on Tuesday. The latest: Nvidia is joining an Abu Dhabi-backed project to develop AI infrastructure pioneered by Microsoft (MSFT) and BlackRock (BLK). The stock is set to claw back some losses after the AI bellwether's shares closed over 3% lower on Tuesday. But the jury is still out on whether Nvidia has given its stock bulls the truly fresh catalyst they want, Yahoo Finance's Brian Sozzi reports. "Jensen delivered the goods and gave the grand AI vision for Nvidia, and that's what long term investors want. Short term, traders wanted something more granular, and just like CES, that was unrealistic," Wedbush tech analyst and Nvidia bull Dan Ives said. "We graded this [an] A+ keynote — inflection point in AI spend." Read more on what Wall Street is saying here. Economic data: FOMC interest rate decision (unchanged) Earnings: Five Below (FIVE), General Mills (GIS), Signet Jewelers (SIG), Williams-Sonoma (WSM) Here are some of the biggest stories you may have missed overnight and early this morning: Wall Street wants new clarity from the Fed and Powell Nvidia, Musk's xAI, and Microsoft join to develop AI infrastructure Dip buyers are feasting on the tariff volatility Cathie Wood sells Meta shares for first time in nearly a year Investors are eyeing egg stocks even as prices fall Trump to approve LNG exports from Venture Global's CP2 project Nvidia debuts next-generation Vera Rubin superchip at GTC 2025 BofA warns of Chinese stock correction 'soon' in 2015 repeat Google's $32 billion deal for Wiz accelerated under Trump Bloomberg reports: Read more here. Oil prices continue a 3-month drop from January with news that Moscow and Kyiv have agreed to a ceasefire on energy infrastructure. Reuters reports: Read more here. The liveliest debate in markets right now is how much stocks, policymakers, businesses, and economic forecasters are reacting — or should be reacting — to Trump's tariffs. And though the Federal Reserve is often the most patient constituent among these groups when it comes to reshaping their current framework, Wednesday's announcement from the Fed makes clear they are not ignoring what the president is doing on trade policy. "Uncertainty around the economic outlook has increased," the Fed said in its statement. "The Committee is attentive to the risks to both sides of its dual mandate." In Fedspeak terms, these are firm statements: the central bank is attuned to the risks of tariff policies and will not hesitate to build them into its forecasts. Along with keeping interest rates steady and still forecasting two rate cuts in 2025, the Fed released forecasts for notably lower GDP growth and higher inflation this year. GDP growth is now expected to be 1.7% in December, down from 2.1% in the Fed's forecasts published in Dec. 2024. Core inflation is now set to stand at 2.8% at the end of the year, up from an earlier forecast for 2.5%. The Fed targets 2% inflation, on average. How these revisions — which essentially outlines the contours of an economy showing some stagflationary tendencies — still back the case for two rate cuts this year will be the main topic of Fed Chair Powell's press conference in about 20 minutes. But we'd note, those "dot plot" projections aren't as clean as "two cuts" may sound — 4 Fed officials think only 1 cut will be needed; 4 others see there being no need to cut rates. The Federal Reserve held interest rates steady in a range of 4.25% to 4.5%. The central bank also released its latest Summary of Economic Projections (SEP), including its "dot plot," which maps out policymakers' expectations for where interest rates could be headed in the future. The median official's forecast for the federal funds rate at the end of 2025 was 3.9%, which would likely represent two 25 basis points cuts this year. As part of the Fed's SEP, officials marked up their projections for core inflation and lowered their forecast for economic growth in 2025. The Fed now also sees the unemployment rate moving to 4.3% from a prior forecast of 4.2%. Stocks are off their highs of the day less than an hour before the Federal Reserve is set to release its latest monetary policy decision. The Dow Jones Industrial Average (^DJI) was up about 0.4%, while the S&P 500 (^GSPC) rose about 0.5%. The tech-heavy Nasdaq Composite (^IXIC) led the gains with a rise of more than 0.7% after the major gauges failed to muster a comeback on Tuesday. Energy (XLE) was the leading sector in the S&P 500 on the day, rising about 1.4%. The 10-year Treasury yield (^TNX) hovered near 4.31%. Yahoo Finance's Brooke DiPalma reports: General Mills (GIS) is in for a tough 2025 as it tries to sell its lineup of cereals and snacks. The Cheerios maker reported earnings on Wednesday that included lower guidance. It expects organic net sales to drop 2% to 1.5% for the year, compared to the previous range of flat to up 1%. "Coming into this year, we thought the consumer environment would improve as the year [goes] on, and that hasn't really been the case," CEO Jeffrey Harmening said on its earnings call. General Mills stock fell 2% in morning trading and is down 7% year to date. Read more here. The Fed decision is slated for release at 2 p.m. ET. Given the central bank is widely expected to hold interest rates steady, investors will be closely watching the Fed's Summary of Economic Projections (SEP). The consensus belief is that Fed policymakers are likely to continue to project two interest-rate cuts this year, in line with market pricing. Meanwhile, they're seen as lowering their forecast for economic growth and revising their inflation projection higher. This, Charles Schwab chief fixed income strategist Kathy Jones said, could pose a risk to markets if the Fed's median projection falls short of two rate cuts. Jones described a median projection of one interest rate cut as a "potential disappointment for markets." Tesla stock (TSLA) is up nearly 4% after a bullish upgrade from Cantor Fitzgerald. Following a recent factory visit, analyst Andres Sheppard wrote that the recent massive downdraft in Tesla shares represented an 'attractive entry point for investors.' He sees the company's autonomous ride-hailing effort in Austin as a likely catalyst for the stock, alongside Full Self-Driving rollouts in China and Europe. Sheppard upgraded the shares to Overweight from Neutral and maintained his $425 price target. That said, the analyst acknowledged that headwinds remained — like Trump tariffs, the likely loss of EV tax credits, and even CEO Elon Musk's political forays. 'We also expect a mild 1Q, driven by lower demand in Europe and increased competition in China, plus some negative sentiment from Elon's polarizing politics,' Sheppard said. Cantor Fitzgerald's Tesla upgrade comes after its former chairman and CEO Howard Lutnick left the firm to become US Commerce Secretary, working alongside DOGE leader Elon Musk at the White House. Though Lutnick stepped down and claims to no longer control Cantor Fitzgerald, he appointed his sons Brandon and Kyle as chairman and executive vice chairman, respectively. Apartment hunters caught a break in February as rents continued their nationwide decline. Data from shows that rents dropped to $1,691 last month, slightly lower than in January and down by $15 compared to February 2024. This marks the 19th straight month of year-over-year declines. Rents have been trending downward for well over a year and a half since the pandemic run-up, but renters are still paying considerably more than they did before. noted that the national rent is 14.4% higher than it was five years ago. Despite the gradual drop in rents, multifamily housing has become less attractive to investors over the past few years. This has led to lower rental unit inventory for the future, which could push rents higher, according to senior economist Joel Berner. Last year, less than 294,000 units in multifamily rentals were authorized for construction across the 50 largest metros, reaching the lowest level since 2017. Berner projects that if the supply of new rental units continues to shrink, the downward trend of rent prices will not hold. "We expect rents to start to grow again in the coming years as the pace of new units hitting the market slows," Berner warned. Boeing (BA) shares added more than 6% after CFO Brian West provided an upbeat update on the company's business on Wednesday morning. The planemaker's cash burn this year is expected to be "hundreds of millions" of dollars lower than previously thought, West said at a Bank of America investor conference. 'We think we're off to a good start for the year,' the finance chief said. Roku (ROKU) shares rose 10% in early trading following news that Trump Media & Technology Group (DJT), the parent company of President Trump's social media platform Truth Social, has partnered with the tech and hardware company to launch a new app. Trump Media, which also operates the fintech brand and streaming platform Truth+, said Wednesday it launched a Roku TV-specific app for users to access the Truth+ platform. "Now available in the Roku Channel Store, Truth+ offers family-friendly TV programming for patriotic Americans who want an alternative to woke entertainment corporations and biased news channels," the company said in a press release. Roku TV owners can download the Truth+ app directly from the Roku Channel Store to their TV sets. In the future, the company plans to introduce Truth+ native apps for additional connected TV platforms, including Samsung and LG. "We're bringing Truth+ to Roku and planning to release more TV apps soon," Trump Media CEO and Chairman Devin Nunes said. "Truth+ is the singular option for non-woke TV and movies, as well as a great alternative to discredited legacy news channels that have squandered the trust of the American people." DJT shares rose 3% on the news, although the stock has fallen nearly 40% since the start of the year and is currently trading near the low end of its 52-week range. Stocks moved slightly higher at the open of US trading on Wednesday. The Dow Jones Industrial Average (^DJI) was up about 0.2%, while the S&P 500 (^GSPC) rose about 0.3%. The tech-heavy Nasdaq Composite (^IXIC) led the gains with a rise of nearly 0.6%, after the major gauges failed to muster a comeback on Tuesday with tech leading the way down. Markets are expected to be in wait-and-see mode throughout the trading session ahead of the Federal Reserve's policy announcement at 2 p.m. ET, followed by Chair Jerome Powell's press conference about 30 minutes later. Turkish financial markets plunged after police there arrested Istanbul's mayor, the main rival to President Erdoğan in Turkey's next election. Stocks on Turkey's benchmark index dropped so fast that it triggered a trading halt, while its currency, the lira, tumbled over 10% to a record low against the dollar at one point. The signs of a political purge spooked investors focused on the prospects for Turkey's recent market-friendly policies. Bloomberg reports: Read more here. Tesla (TSLA): Shares in the electric vehicle maker bounced back by 3% in premarket trading after the stock sold off Tuesday on new competitive pressures from Chinese rivals BYD, Xiaomi, and XPeng. Tesla stock has provided a windfall for short sellers this year, as it's down over 44% since the start of 2025. Also on Wednesday, Howard Lutnick's Cantor Fitzgerald upgraded Tesla shares to a Buy rating, writing that the recent sell-off 'represents an attractive entry point for investors.' Strategy (MSTR): The bitcoin holder formerly known as MicroStrategy rose 1.9% in early trading and looks poised to stage a comeback from yesterday's sell-off. The Michael Saylor-run firm said it would be selling stock to buy more bitcoin on Tuesday, sending mixed signals to investors. General Mills (GIS): Shares in the maker of Pillsbury and Cheerios fell nearly 4% premarket after General Mills forecast a sharp decline in annual sales and profit Wednesday morning. Consumers switching to private-label brands has hit the cereal and snack maker particularly hard. Intel (INTC): Intel stock slipped premarket in a week where investors weighed incoming CEO Lip-Bu Tan's AI plan to turn the ailing chipmaker's business around. Shares are off by 2.5% after a five-day winning streak. Wall Street is convinced the Fed won't make any move on interest rates today, given the risk of Trump's tariffs hitting the economy. "Uncertainty" is the watchword it expects to hear. "Fed Chair Powell is probably going to say that over and over," Wilmington Trust portfolio manager Wil Stith said. Investors are focused instead on the 2 p.m. ET release of the Fed's quarterly forecasts — otherwise known as the Summary of Economic Projections (SEP) — for any clues to the path forward, Yahoo Finance's Jennifer Schonberger reports. Read more here. Nvidia (NVDA) shares turned slightly higher in premarket trading, up about 1% as investors digested a stream of news from the chipmaker's annual GTC event. The highlight: the next-gen Blackwell Ultra chip, unveiled by CEO Jensen Huang in his keynote on Tuesday. The latest: Nvidia is joining an Abu Dhabi-backed project to develop AI infrastructure pioneered by Microsoft (MSFT) and BlackRock (BLK). The stock is set to claw back some losses after the AI bellwether's shares closed over 3% lower on Tuesday. But the jury is still out on whether Nvidia has given its stock bulls the truly fresh catalyst they want, Yahoo Finance's Brian Sozzi reports. "Jensen delivered the goods and gave the grand AI vision for Nvidia, and that's what long term investors want. Short term, traders wanted something more granular, and just like CES, that was unrealistic," Wedbush tech analyst and Nvidia bull Dan Ives said. "We graded this [an] A+ keynote — inflection point in AI spend." Read more on what Wall Street is saying here. Economic data: FOMC interest rate decision (unchanged) Earnings: Five Below (FIVE), General Mills (GIS), Signet Jewelers (SIG), Williams-Sonoma (WSM) Here are some of the biggest stories you may have missed overnight and early this morning: Wall Street wants new clarity from the Fed and Powell Nvidia, Musk's xAI, and Microsoft join to develop AI infrastructure Dip buyers are feasting on the tariff volatility Cathie Wood sells Meta shares for first time in nearly a year Investors are eyeing egg stocks even as prices fall Trump to approve LNG exports from Venture Global's CP2 project Nvidia debuts next-generation Vera Rubin superchip at GTC 2025 BofA warns of Chinese stock correction 'soon' in 2015 repeat Google's $32 billion deal for Wiz accelerated under Trump Bloomberg reports: Read more here. Oil prices continue a 3-month drop from January with news that Moscow and Kyiv have agreed to a ceasefire on energy infrastructure. Reuters reports: Read more here. Sign in to access your portfolio
