Market news 30 jan
FOMC Decision: Rate Hold and Updated Statements
Trading session ended with mixed results as investors exercised caution ahead of important statements from the Federal Open Market Committee (FOMC). Despite early market instability, overall reaction to the Fed's decision remained moderate.
FOMC !
The committee unanimously kept the federal funds rate target range at 4.25–4.50%, in line with analysts' expectations. However, key changes were made to the wording of the official statement. The phrase indicating that inflation had reached the committee’s 2% target was removed and replaced with a statement that "inflation remains somewhat elevated." This signals a more cautious approach to assessing inflationary risks.
Federal Reserve Chair Jerome Powell emphasized that there is no need to rush policy changes, as the economy remains resilient and restrictive measures are gradually easing. The market's response to his statements was measured despite brief volatility.
Company News and Stock Performance
Tesla (TSLA)
Tesla shares fell after the release of a quarterly report that failed to meet analyst expectations. While the company's revenue grew by 2.1% year-over-year to $25.7 billion, EPS came in at $0.73, below the consensus forecast of $0.77. Operating margin declined to 6.2% from 10.8% in the previous quarter, raising investor concerns.
Microsoft (MSFT)
Microsoft shares declined 3% in after-hours trading due to weaker-than-expected growth in its Azure cloud division. Despite overall revenue growth of 12% to $69.6 billion, projected increases in capital expenditures raised investor doubts.
ServiceNow (NOW)
ServiceNow shares dropped 9% after the company's first-quarter and 2025 guidance fell short of expectations. While quarterly revenue reached $2.96 billion, matching analyst forecasts, weak subscription revenue projections pressured stock prices.
Lam Research (LRCX)
Unlike most tech companies, Lam Research shares rose 7% following strong quarterly results. The company's revenue increased 14.6% year-over-year, and its operating margin exceeded analyst estimates, highlighting strong performance in the semiconductor equipment sector.
Globalstar (GSAT) and AST SpaceMobile (ASTS)
Both companies saw sharp declines in stock prices—17.5% and 10.33%, respectively—after the announcement of a strategic partnership between Apple, Starlink (SpaceX), and T-Mobile. This collaboration threatens the competitive positions of these satellite communications providers.
ASML Holdings (ASML)
ASML shares gained nearly 5% after its CEO assured investors that advancements in artificial intelligence would not negatively impact demand for semiconductor manufacturing equipment. Despite increasing automation, the need for advanced computing power remains high.
Teva Pharmaceutical (TEVA)
The pharmaceutical giant lost 13% of its market value after issuing a lower-than-expected 2025 earnings forecast. Although fourth-quarter results met expectations, the weaker projected earnings raised investor concerns.
Meta Platforms (META)
Meta is considering integrating the Chinese AI model DeepSeek into its advertising services. This move aims to improve content generation accuracy, addressing concerns from advertisers dissatisfied with Meta's current AI-generated content.
The stock market exhibited mixed performance, reflecting investors' cautious stance ahead of the Fed’s decision. While interest rates remained unchanged, revisions to the statement suggest a more careful approach to inflation assessment. In the corporate sector, weak earnings from Tesla, Microsoft, and ServiceNow contrasted with strong performances from ASML and Lam Research. Current market volatility necessitates close monitoring of macroeconomic factors and corporate earnings reports.