At 2 p.m. on Wednesday, stock markets fell immediately after the Federal Reserve announced its interest rate policy. The FOMC kept the Fed Funds rate steady. Fed Chair Powell said that the committee would “wait and see” with its monetary policy.
By the end of the trading session, stocks rose when the media reported that the White House planned to reverse the global chip curbs during former President Biden’s presidency.
The Fed is letting the tariff trade war play out. This includes monitoring the 90-day pause since Liberation Day and the initiation of trade discussions with other countries. Investors bought back shares of Amazon (AMZN), Meta Platforms (META), Nvidia (NVDA), and Broadcom (AVGO). Alphabet (GOOG) lost 7.5% on the day. Apple’s senior vice president of services, Eddy Cue, said that Apple (AAPL) might add competing AI search engines. Apple users might get Perplexity as their default Safari web browser.
Treasury bond yields fell after the Fed did not change rates. The job situation and stable inflation rate support the Fed maintaining its target rate at 425 to 450 bps. This suggests that investors may buy longer-duration bonds. The 7-10 year ETF (IEF) and the 20+ year (TLT) might climb higher from here.
