Tech Stocks Lower Amid Muted Market Sentiment
Wednesday, January 29, 2025
The tech-heavy Nasdaq Composite (^IXIC) declined by approximately 0.5%, reversing some of its recovery from Tuesday. The S&P 500 (^GSPC) also fell by about 0.5%, while the Dow Jones Industrial Average (^DJI) lost 0.3%.
The Federal Reserve's latest decision to hold interest rates unchanged at 4.25%-4.5% contributed to the subdued mood. In its statement, the Fed removed language indicating progress towards its 2% inflation target, stating instead that "inflation remains somewhat elevated." Chair Jerome Powell downplayed the change as "language cleanup."
Nvidia Pressures Tech Sector
Outside of Fed policy, Nvidia (NVDA) continued to pressure the tech sector. The stock dropped by over 4% following a Bloomberg report that the Trump administration was considering additional curbs on the company's chip exports.
Big Tech Earnings Kick Off
After the closing bell on Wednesday, major tech companies began reporting earnings.
* Tesla (TSLA) reported lower-than-expected earnings per share but rose by 3% after hours.
* Meta (META) saw its stock decline after reporting weaker-than-anticipated sales guidance.
* Microsoft (MSFT) also experienced a drop in stock price after its cloud revenue missed estimates.
Other Notable Developments
* IBM (IBM) shares surged by over 11% after-hours on higher-than-expected revenue and increased AI bookings.
* Alexandra Canal reported on Powell's stance on cryptocurrencies, emphasizing that banks can serve crypto customers as long as they manage risks adequately.
* Josh Schafer highlighted Powell's dismissal of DeepSeek's impact on the stock market and his comments on the labor market and shelter inflation.
* Myles Udland discussed Powell's clarification of the Fed statement changes and the potential impact of President Trump's request for lower interest rates.
* Ben Werschkul reported on Commerce Secretary nominee Howard Lutnick's preference for broad tariffs to address economic issues, including AI protection.