The Feds held rates steady at 4.25%-4.50%, and Powell made it clear—no rush to cut. Markets weren’t thrilled.

Investors are now juggling a tricky mix: sticky inflation, a cautious Fed, and earnings that are all over the place. Nvidia’s struggles continued, tech stocks dragged, and real estate took a hit, but Starbucks and T-Mobile delivered much-needed bright spots.

Powell’s Message: Patience, Not Panic
➝ Inflation? “Somewhat elevated,” so no urgency to cut.
➝ Rate Path? “We’re watching.” Translation: We’ll let markets stew for now.

⚡ Closing Bell:

• Dow Jones: ⬇️ -0.3% › 44,713.5 › Held up better than tech-heavy peers.

• S&P 500: ⬇️ -0.5% › 6,039.3 › Nvidia’s slump weighed on the index.

• Nasdaq 100: ⬇️ -0.5% › 19,632.3 › Another choppy session for tech.

• Russell 2000: ⬇️ Small caps struggling to gain traction.

Sector Moves:
✅ Winners: Communication Services, Consumer Staples, Defensive names found demand.
❌ Losers: Tech & Real Estate › Higher-for-longer rates hurt growth sectors.

Treasuries & Economic Pulse:

• 10-year yield: ⬆️ 4.53% › Little changed as traders await Powell’s remarks.

• Consumer confidence dipped, marking its first decline since September.

• US home prices hit another record, pushing affordability concerns higher.

• Durable goods orders fell unexpectedly, with a sharp drop in aircraft demand

• Mortgage Applications: 📉 Dropped again as refinancing slowed.

❗ What’s next?
With the Fed decision behind us, all eyes turn to Friday’s PCE inflation report—the Fed’s preferred gauge of price stability. Markets are watching closely.

#TRUTH:
❗❗❗ “If it is right, it happens—the main thing is not to hurry. Nothing good gets away.” ~ John Steinbeck

Not Exactly Full Throttle:

Tesla’s Q4 earnings skidded past expectations—and not in a good way.
Revenue came in at $25.71B (vs. $27.21B expected), and adjusted EPS of $0.73 fell short of the $0.75 estimate.
🚩 The bigger red flag? Operating income crashed to $1.58B, miles away from the $2.68B projection.

Full-year numbers weren’t much better: Net income dropped 23%, and Tesla delivered fewer cars than last year—the first annual decline in over a decade.

What’s Slowing Tesla Down?
➝ Lower Prices, Lower Margins – Price cuts helped move units but crushed profits.
➝ Heavy Spending on AI & Autonomy – Big bets, but not much near-term payoff.
➝ Cybertruck Jitters – Discounts already? Demand might not be as bulletproof as the truck.

Can Tesla Shift Gears?
Tesla is banking on 2025 and beyond to turn things around:

• Cheaper models coming early next year.

• Cybercab Robotaxi expected to hit fleet testing this year, with full rollout in 2026.

• Global FSD expansion into Europe & China on the horizon.

• Energy storage growth remains a bright spot, targeting 50% YoY expansion.

The Stock’s Wild Ride: Tesla dropped after-hours but reversed higher as traders reassessed the long game.

Bottom Line: Tesla’s growth engine is sputtering, but its AI & autonomy dreams could be the next ignition switch.

AI Bill:

Meta (META) smashed Q4 earnings, but Wall Street’s still side-eyeing its spending habits. Shares dropped 4% after hours before clawing back as investors weighed the good, the bad, and the AI-fueled money burn.

The Good:

➝ EPS: $8.02 (beat $6.75 expected)
➝ Revenue: $48.4B (beat $46.9B expected)
➝ Full-year net income: $62.4B (+59% YoY)

The Not-So-Good:

➝ Spending Spree: Meta now expects $114B-$119B in 2025 expenses, up from $95B last year.
➝ AI, AI, AI: Zuck’s dropping $60B-$65B on data centers alone—enough to cover a chunk of Manhattan.
➝ Slowing Revenue Growth: Q1 projections hint at an 8%-15% growth rate—decent, but cooling from Q4’s 21% jump.

Wall Street’s Take:

Meta is growing, but at a cost. Investors love the revenue beats, but the massive spending is raising eyebrows. With AI bets piling up, the market is watching closely to see if Meta can turn all those billions into real returns.

➝ Bull case: AI dominance, ad revenue growth, and metaverse bets that could pay off big.
➝ Bear case: Ballooning costs, regulatory headwinds, and slowing revenue growth.

For now, the stock’s holding up—but with spending this high, Zuck better have a plan.

Sell Button:

Microsoft’s latest earnings report had something for everyone—just not enough for investors. While the company beat on revenue and earnings per share, its cloud business fell short, and that was enough to send the stock down more than 4% after hours.

The Numbers:

➝ Intelligent Cloud Revenue – $25.5B vs. $25.8B expected
➝ Commercial Cloud Revenue – $40B vs. $41.1B expected
➝ EPS – $3.23 vs. $3.13 expected
➝ Total Revenue – $69.6B vs. $68.8B expected

AI’s Not Moving the Needle (Yet)

Microsoft has been pouring cash into AI infrastructure, spending billions on data centers and beefing up Azure’s capabilities. AI services contributed 13 percentage points to Azure’s revenue growth, but cloud margins dipped to 70% thanks to the heavy investment.

CEO Satya Nadella remained bullish.

The DeepSeek Effect?

China’s DeepSeek AI has been spooking investors by proving that AI models can be trained at a fraction of the cost. That’s raising uncomfortable questions:
➝ Are tech giants overspending on AI?
➝ Will AI infrastructure spending actually pay off?

With Microsoft committing $80B in AI investment for 2025, Wall Street isn’t fully convinced the money will deliver immediate returns.

Stock Check:

➝ Amazon (AMZN) – Up 44% in the last 12 months
➝ Google (GOOG) – Up 26%
➝ Microsoft (MSFT) – Just +5%

What’s Next?

Microsoft is betting on AI-powered PCs (Copilot+ PC lineup) to reinvigorate hardware demand, but the jury’s still out on whether consumers actually need AI-powered machines.

$1.7T Nest Egg 🇳🇴 :

Some investments age like fine wine. Norway’s decision to stash its oil profits into a sovereign wealth fund back in 1990? That might be one of the smartest financial moves ever.

Fast forward to today, and that fund—now worth a staggering $1.78 trillion—just posted a record-breaking $222 billion profit in 2024. That’s the equivalent of $319,900 per Norwegian citizen. Not bad for a country of just 5.5 million people.

How They Did It:

➝ Massive Equity Exposure – The fund owns 1.5% of all listed stocks globally, making it the world’s largest single investor.
➝ Tech Windfall – Big Tech’s rally supercharged returns, with AI-driven stocks fueling much of the growth.
➝ Green Shift – While oil built the fund, Norway is now pouring capital into renewable energy and electric vehicle infrastructure.

The Ironic Twist:

Norway is on track to be the first country to fully transition to electric vehicles, with EVs making up 96% of new car sales. So, in a plot twist, the country is funding its green revolution with trillions in petrodollars.

❗ Lesson? If you’re sitting on a goldmine (or an oil field), invest wisely—because decades later, you might just own the market.

Highlights of the Day:

① AI Hangover Continues ❌

• Nvidia (NVDA): ⬇️ -4.02% › AI competition heats up, plus more US chip restrictions.

• AMD (AMD): ⬆️ +2.84% › Pitching its chips to DeepSeek AI to stay relevant.

② Earnings Bright Spots: ✅

• Starbucks (SBUX): ⬆️ +8.1% › “Not as bad as feared” was enough to send shares soaring.

• T-Mobile (TMUS): ⬆️ +6.3% › Blew past expectations, logging its best day in two years.

③ Tech’s Mixed Bag

• ASML (ASML): ⬆️ +4.3% › Strong orders helped lift sentiment.

• F5 Inc. (FFIV): ⬆️ +11.4% › IT demand put it at the top of the S&P 500 leaderboard.

Commodities Check: ✔️

• Crude Oil: ⬇️ $72.95 (-1.1%) › Higher US stockpiles weighed on prices.

• Gold: ⬆️ $2,771.30 (+0.1%) › Safe-haven demand remains.

• Silver: ⬆️ $31.57 (+2.2%) › The day’s standout metal.

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The stinger

Disclaimer

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