Tech Stocks Decline Amid Subdued Mood After Fed Interest Rate Decision

Market Overview
Tech stocks dragged down markets on Wednesday as investors remained cautious following the Federal Reserve's recent interest rate decision. The Fed maintained rates within a range of 4.25%-4.5%.
- Nasdaq Composite (^IXIC): Down 0.5%
- S&P 500 (^GSPC): Down 0.5%
- Dow Jones Industrial Average (^DJI): Down 0.3%

Federal Reserve Statement
The Fed's statement notably removed language indicating progress towards its inflation target of 2%, stating only that "inflation remains somewhat elevated." Fed Chair Jerome Powell clarified this as a "language cleanup," but markets initially reacted negatively.

Nvidia Pressures Tech Sector
Outside of Fed policy, Nvidia (NVDA) faced additional pressure due to a report from Bloomberg that the Trump administration was weighing further restrictions on exports of its chips.

Big Tech Earnings
After the close on Wednesday, Big Tech companies reported earnings:
- Tesla (TSLA): Missed expectations on earnings per share and key metrics, but rose 3% after hours.
- Meta (META): Fell 5% after hours due to weaker sales forecast and higher capital expenditures than anticipated.
- Microsoft (MSFT): Dipped 5.5% after hours on revenue shortfall in its cloud business.
- IBM (IBM): Surged 11% after hours on revenue forecast that exceeded estimates and increased artificial intelligence bookings.

Powell on Crypto and Innovation
Powell emphasized that the Fed is not opposed to innovation in the crypto sector and that banks are permitted to serve crypto customers, provided they manage risks effectively.

Powell Shrugs Off DeepSeek Sell-Off
Powell dismissed Monday's tech sell-off, triggered by Chinese startup DeepSeek's AI model, as an isolated market event rather than a macroeconomic concern.

Forecast Uncertainty
Powell acknowledged elevated uncertainty in economic forecasts due to recent policy shifts, including tariffs, immigration, fiscal policy, and regulatory policy.

Fed Sees 'Elevated Inflation'
Despite signs of moderation in shelter inflation, the Fed stated that inflation remains elevated and that further progress is necessary.

Trump and Interest Rates
Powell confirmed that he has not had any contact with President Trump regarding interest rate demands.

Nvidia Extends Losses on China Export Concerns
Nvidia stock extended losses after a report that the Trump administration was exploring additional curbs on sales of its chips to China.

Retail Investors Buy Nvidia Dip
Retail investors purchased over $900 million of Nvidia stock during the recent market volatility, indicating bullish sentiment towards the company despite the AI model concerns.

Starbucks Turnaround
Starbucks (SBUX) reported improved sequential sales trends in the US and announced plans for continued growth, leading to a 5% surge in its stock price.