Yesterday’s main market event, during regular hours anyway, turned into a non-event- the Fed rate decision and Powell press-conference. You can read more about it in our Fed Recap, but long story short, there wasn’t much sizzle or steak. The Fed kept rates unchanged, Powell did his own rendition of We Don’ Talk About Bruno when asked about non-Mon-Pol questions, and it looks like we’ll be on hold for a bit longer. Perhaps the bigger let down was that we didn’t get a Trump tweet right as Powell took the mic, announcing his pick for new Fed Chair. Markets didn’t react much. The S&P traded in a 20bp range in the last two hours of the day and finished flat. The equal-weight trailed, falling 0.3% and small caps declined 0.5%. Energy and Tech were the best sectors- semis were strong for Tech. Rates ended the day basically unchanged and the US Dollar ended slightly higher but pulled back from its best levels. With the Fed a non-event, major tech earnings after the close became the focal point for traders at least until metals went parabolic again overnight.

The tech earnings last night were mixed. The overarching theme from hyperscalers was that capex spending is continuing with no end in sight, but the market response couldn’t have been starker with Microsoft selling off sharply and Meta solidly higher. At a very high level the reaction is a function of how management explained the return on that investment which we’ll detail a bit more below. Software was another area of focus within tech earnings, this sector has been under significant pressure YTD, as the AI disruption narrative has gotten louder. The earnings here were also a mixed bag with IBM being the lone upside standout.