March S&P 500 E-Mini futures (ESH25) are down -0.15%, and March Nasdaq 100 E-Mini futures (NQH25) are up +0.27% this morning as market participants braced for the Federal Reserve’s interest rate decision and U.S. megacap tech earnings.
Futures on the Nasdaq 100 outperformed as semiconductor stocks climbed in pre-market trading after Dutch firm ASML Holding reported stronger-than-expected Q4 order bookings. Micron Technology (MU), KLA Corp. (KLAC), and Applied Materials (AMAT) are up more than +3%.
In yesterday’s trading session, Wall Street’s three main equity benchmarks ended in the green. Royal Caribbean Cruises (RCL) surged +12% and was the top percentage gainer on the S&P 500 after the cruise line operator provided a strong full-year adjusted EPS forecast. Also, megacap technology stocks gained ground, with Nvidia (NVDA) climbing more than +8% to lead gainers in the Dow and Apple (AAPL) advancing over +3%. In addition, RTX Corp. (RTX) rose more than +2% after the aerospace and defense company posted upbeat Q4 results. On the bearish side, Lockheed Martin (LMT) slumped over -9% and was the top percentage loser on the S&P 500 after the defense giant reported weaker-than-expected Q4 results and issued below-consensus FY25 EPS guidance.
Economic data released on Tuesday showed that the U.S. Conference Board’s consumer confidence index unexpectedly fell to a 4-month low of 104.1 in January, weaker than expectations of 105.7. Also, U.S. December durable goods orders dipped -2.2% m/m, weaker than expectations of +0.3% m/m, while core durable goods orders, which exclude transportation, advanced +0.3% m/m, weaker than expectations of +0.4% m/m. In addition, the U.S. November S&P/CS HPI Composite - 20 n.s.a. increased to +4.3% y/y from +4.2% y/y in October, stronger than expectations of no change at +4.2% y/y. At the same time, the U.S. Richmond Fed manufacturing index unexpectedly rose to an 8-month high of -4 in January, stronger than expectations of -13.
Today, all eyes are focused on the Federal Reserve’s monetary policy decision later in the day. The Federal Open Market Committee is widely expected to keep the fed funds target range unchanged at 4.25%-4.50%. Market watchers will likely focus on Fed Chair Jerome Powell’s post-policy meeting press conference for any additional clues about when interest rates might be lowered further.
A survey conducted by 22V Research showed that 67% of respondents anticipate the market reaction to the Fed to be “mixed/negligible,” 21% predict “risk-off,” and 12% forecast “risk-on.”
“Markets are not expecting a cut and will focus on what the Fed projects for the rest of 2025,” said Bowersock Hill. “Both inflation and interest rates are going to remain higher for longer – we would not be surprised to see one rate cut in 2025, or even none.”
Fourth-quarter corporate earnings season rolls on. Investors will be closely monitoring earnings reports today from a trio of the “Magnificent Seven” companies - Microsoft (MSFT), Meta Platforms (META), and Tesla (TSLA). Prominent companies like T-Mobile US (TMUS), ServiceNow (NOW), International Business Machines (IBM), and Lam Research (LRCX) are also scheduled to release their quarterly results today. According to Bloomberg Intelligence, companies in the S&P 500 are expected to post an average +7.5% increase in quarterly earnings for Q4 compared to the previous year.
On the economic data front, investors will focus on U.S. Wholesale Inventories data, which is set to be released in a couple of hours. Economists expect the preliminary December figure to be +0.2% m/m, compared to -0.2% m/m in November.
U.S. Crude Oil Inventories data will be released today as well. Economists estimate this figure to be 2.200M, compared to last week’s value of -1.017M.
In the bond market, the yield on the benchmark 10-year U.S. Treasury note is at 4.523%, down -0.57%.
The Euro Stoxx 50 Index is up +0.67% this morning as strong quarterly results from chip equipment maker ASML boosted sentiment, with the focus now turning to the Fed’s rate decision and U.S. tech earnings. Technology stocks led the gains on Wednesday, with ASML Holding (ASML.NA) surging over +9% after the company reported better-than-expected Q4 order bookings. A survey released on Wednesday showed that German consumer sentiment is set to decline heading into February, reflecting fading expectations of an economic rebound amid rising layoffs and upcoming national elections next month. Separately, preliminary data from the National Statistics Institute showed that Spain’s economy grew faster than expected at the end of last year. Meanwhile, Sweden’s central bank cut its key rate by a quarter point to 2.25% and indicated that its easing campaign might be paused for the time being as officials evaluate the effects of their actions so far. Investors are also awaiting the European Central Bank’s policy verdict on Thursday, with the central bank widely expected to lower its benchmark interest rate by 25 basis points. In other corporate news, LVMH (MC.FP) slumped more than -5% after the world’s largest luxury company posted quarterly sales that failed to impress investors.
Germany’s GfK Consumer Climate Index and Spain’s GDP (preliminary) data were released today.
The German February GfK Consumer Climate Index arrived at -22.4, weaker than expectations of -20.5.
The Spanish GDP has been reported at +0.8% q/q and +3.5% y/y in the fourth quarter, stronger than expectations of +0.6% q/q and +3.2% y/y.
Japan’s Nikkei 225 Stock Index (NIK) closed up +1.02%, while China’s financial markets were closed for a holiday.
Japan’s Nikkei 225 Stock Index closed higher today, tracking Wall Street’s rebound from a recent selloff sparked by the emergence of China’s DeepSeek. Chip-related stocks led the gains on Wednesday, with Advantest climbing over +4% and Tokyo Electron rising more than +2% after ASML’s Q4 order bookings topped analyst expectations. Data released on Wednesday showed that Japan’s consumer confidence index unexpectedly fell to a 16-month low in January. Meanwhile, minutes from the Bank of Japan's December meeting revealed that BOJ board members debated how to utilize estimates of the economy’s neutral interest rate to guide further rate hikes, with one member noting that the central bank’s policy rate was well below that level. In corporate news, Sony Group gained over +3% after naming President Hiroki Totoki as CEO, effective April 1st. At the same time, Shin-Etsu Chemical slid more than -4% after the silicon wafer maker left its full-year earnings guidance unchanged. Investors are awaiting Japan’s inflation, labor, and other economic data, scheduled for release on Friday, to gain additional insights into the BOJ’s monetary policy outlook. The Nikkei Volatility Index, which takes into account the implied volatility of Nikkei 225 options, closed down -7.97% to 21.93.
The Japanese January Household Confidence stood at 35.2, weaker than expectations of 36.6.
China’s Shanghai Composite Index was closed today for the Lunar New Year holiday. Mainland China’s financial markets will reopen on Wednesday, February 5th.
Pre-Market U.S. Stock Movers
Chip stocks are moving higher in pre-market trading after ASML Holding reported stronger-than-expected Q4 order bookings. Micron Technology (MU), KLA Corp. (KLAC), and Applied Materials (AMAT) are up more than +3%.
Nextracker (NXT) soared about +20% in pre-market trading after reporting better-than-expected FQ3 results and raising its FY25 EPS guidance.
F5 Networks (FFIV) surged over +14% in pre-market trading after the company posted upbeat FQ1 results and raised its FY25 guidance.
LendingClub Corp. (LC) tumbled more than -22% in pre-market trading after the lender posted mixed Q4 results and offered soft Q1 guidance.
Moderna (MRNA) slid over -3% in pre-market trading after Goldman Sachs downgraded the stock to Neutral from Buy.
You can see more pre-market stock movers here
Today’s U.S. Earnings Spotlight: Wednesday - January 29th
Microsoft (MSFT), Meta Platforms (META), Tesla (TSLA), T-Mobile US (TMUS), ServiceNow Inc (NOW), IBM (IBM), Danaher (DHR), ADP (ADP), Lam Research (LRCX), Waste Management (WM), Canadian Pacific Kansas City (CP), General Dynamics (GD), Norfolk Southern (NSC), Ameriprise Financial (AMP), United Rentals (URI), MSCI (MSCI), Nasdaq Inc (NDAQ), Hess (HES), Corning (GLW), Raymond James Financial (RJF), Las Vegas Sands (LVS), CGI Inc (GIB), Lennox (LII), Western Digital (WDC), Teradyne (TER), Flex (FLEX), CH Robinson (CHRW), Stifel (SF), Annaly Capital Management (NLY), SEI (SEIC), Celestica Inc. (CLS), VF (VFC), Tetra Tech (TTEK), Applied Industrial Technologies (AIT), Eagle Materials (EXP), Dolby Labs (DLB), Prosperity Bancshares (PB), Axis Capital (AXS), Whirlpool (WHR), Levi Strauss A (LEVI), Robert Half (RHI), Brinker (EAT), Landstar (LSTR), National Fuel Gas (NFG), Group 1 Automotive (GPI), Meritage (MTH), Selective (SIGI), Silgans (SLGN), Avnet (AVT), Scotts Miracle-Gro (SMG), Hess Midstream Partners (HESM), M/I Homes (MHO), First Interstate BancSystem (FIBK), Methanex (MEOH), Virtu Financial Inc (VIRT), Liberty Oilfield (LBRT), Calix (CALX), Hawkins (HWKN), Century Communities (CCS), Extreme (EXTR), Cimpress NV (CMPR), MaxLinear (MXL), Benchmark Electronics (BHE), Navient (NAVI), Two Harbors (TWO), Brookline Bancorp (BRKL), John B Sanfilippo&Son (JBSS), Southside (SBSI).
