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Market indexes had been riding a zero balance for most of today’s trading session, but shifted lower following the news release of what we all knew ahead of time: the Fed did not move on interest rates at the end of its two-day meeting on monetary policy, keeping steady at +4.25-4.50% for the second-straight meeting. The Dow shed another -136 points today, while the S&P 500 gave back -28, the Nasdaq -103 and the small-cap Russell 2000 -4 points in late trading.

Fed Keeps Interest Rates Steady on Stable Economic Report Card
 

In his press conference following the Fed statement that interest rate changes would remain in place, Fed Chair Jerome Powell had very little to criticize in today’s U.S. economy: Inflation is now much closer to the Fed’s optimum +2% rate than it has been over the course of rate adjustments going back nearly three years, even as it has drifted back up near +3% from a +2.4% reached in September of last year. Unemployment has stabilized since mid-2024, and has remained historically low.

Powell does not see labor as a significant source of inflation, with nominal wage growth having eased over the past year. Activity in Housing has also stabilized, with resilient Consumer Spending keeping the economy buoyant. The Fed Chair said rather emphatically that it will not be adjusting its +2% inflation rate goal anytime soon. Considering the potential impact of tariffs, Powell inferred he was in the same boat as everyone else: we’ll need to wait and see.

Biggest Afternoon of Earnings Results So Far
 

It’s a star-studded afternoon on the earnings season beat, with Mag 7 stocks reporting alongside AI growth plays and old-school tech also seeing a boost from the AI market. Results are wide-ranging, too, even as headline numbers are mostly positive across the board.

Microsoft (MSFT - Free Report) shares are lower after beating fiscal Q2 estimates on both top and bottom lines. Earnings of $3.23 per share outpaced the $3.11 in the Zacks consensus and the $2.93 posted in the year-ago quarter, with revenues of $69.63 billion surpassing the $68.70 billion anticipated. Azure growth was in-line at +31%, though lower from the +33% the prior quarter. A not-insignificant +13% of Azure growth in the quarter came from AI-related services.

As always with Microsoft, the conference call will provide the lion’s share of details for the quarter. Shares had initially sold off -5% on the news, but have flowed back some moments before the conference call. Microsoft stock had been up nearly +5% year to date.

Tesla (TSLA - Free Report) also saw an initial drop in late-trading share price following its Q4 misses this afternoon, but have since moved back into positive territory. Earnings of 73 cents per share missed expectations by 2 cents, while revenues for the quarter of $25.71 billion illustrated a sizable miss from the $27.50 billion analysts were looking for. But a commitment to producing less-expensive Tesla vehicles, as well as a favorable outlook toward future energy storage and cybercab production helped shares flow upward.

Meta Platforms (META - Free Report) posted a strong bottom-line beat in its Q4 report, with earnings of $8.02 per share storming past the $6.68 projected. Revenues also came in stronger than expected at $48.39 billion from $46.97 billion in the Zacks consensus, with Daily Active People slightly ahead of expectations at 3.35 billion. However, revenue guidance for Q1 provided a range where the midpoint is well below the estimate of $41.60 billion, and this has helped shares of the social media juggernaut down -1% in late trading.

IBM (IBM - Free Report) shares, meanwhile, leapt +12% in late trading directly following its big beats in its Q4 report after today’s close. Earnings of $3.92 per share outperformed expectations of $3.73 and the $3.87 per share posted a year ago, on revenues of $17.55 billion which were a smidge below the Zacks consensus. AI bookings added +$5 billion to the company’s top line, with non-GAAP gross margins topping estimates to +60.6%.

ServiceNow (NOW - Free Report) also surpassed estimates on both top and bottom lines in its Q4 numbers this afternoon — earnings of $3.67 per share on $2.96 billion bettered the $3.58 per share and $2.95 billion anticipated. The cloud-based digital workflow provider also provided lower Q1 revenue guidance, which has assisted shares -8% on the news, more than giving back the +7.8% growth the company had gained year to date.

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