On Wednesday, technology stocks propelled U.S. markets higher for a second consecutive day as investors positioned themselves ahead of earnings reports from major tech companies and the Federal Reserve's interest rate decision. The dollar stabilized, while gold briefly surpassed $5,300 per ounce. Notably, former President Trump might pre-emptively nominate the next Fed Chair, potentially announcing it concurrently with the January FOMC meeting expected to hold rates steady.
As of writing, Dow Jones futures edged up 0.04%, S&P 500 futures climbed 0.37%, and Nasdaq futures led the gains, advancing 0.95%.
The MSCI All-Country World Index hovered near record highs. Nasdaq 100 futures rose nearly 1%, suggesting the benchmark index could challenge the record high set last October. S&P 500 futures indicated the index might test the 7,000-point level. The dollar, after hitting a near four-year low on Tuesday, recovered slightly, rising 0.3% on Wednesday.
The strength in U.S. index futures followed news of a significant surge in orders for chip equipment maker ASML Holding NV, which sent its shares soaring as much as 7.5% in Amsterdam. Asian tech stocks also climbed after SoftBank Group stated it was in talks with OpenAI about a potential $300 billion investment. In South Korea, unprecedented demand for memory chips drove strong earnings growth for SK Hynix.
European benchmark indices failed to follow the global risk-on sentiment, instead declining 0.4%. This was driven by a sell-off in a Goldman Sachs-curated basket of luxury stocks following a weak sales report from LVMH, marking its largest drop in nearly five months.
The overall optimistic mood in equities stems from investor expectations that the Federal Reserve will maintain its current stance and has already priced in roughly two 25-basis-point rate cuts for 2026. Three heavyweight members of the "Magnificent Seven"—Microsoft, Tesla, and Meta Platforms—are scheduled to report earnings later on Wednesday.
Claudia Panseri, Chief Investment Officer for France at UBS Global Wealth Management, commented, "I believe the technology sector is likely to continue driving the market higher, so this rally isn't over yet. If you add potential Fed rate cuts on top of that, it would be a further positive factor for the future."
The Fed's decision is imminent. Markets widely expect the Fed to keep rates unchanged at this meeting. However, the meeting is overshadowed by multiple political factors: a criminal investigation into Fed Chair Jerome Powell by the Trump administration, efforts to remove Fed Governor Lisa Cook, and the impending nomination of a successor to replace Powell, whose term expires in May.
Chris Brigati of SWBC noted that with the U.S. economy still showing remarkable strength, the Fed's language would likely emphasize that future policy decisions will be "data-dependent." Investors will also be watching for any Fed commentary that could impact the dollar.
Jan von Gerich, Chief Market Analyst at Nordea, observed, "Last week, there seemed to be a broad 'exit from the U.S.' theme—equities fell, U.S. Treasuries were sold off, and the dollar dropped. Now, it looks more like a pure 'dollar story'." He added, "The most interesting part of tonight's Fed meeting will be whether Powell says more about the political pressure—something he has so far avoided discussing."
According to analysts, former President Trump could announce his nominee to replace Powell as soon as this week, potentially timing the announcement to coincide with the Fed's January policy meeting to influence the market's interpretation of the policy stance.
The Federal Open Market Committee (FOMC) will announce its rate decision on Wednesday. The meeting itself carries heightened sensitivity amid renewed focus on central bank independence. Analysts believe that if the White House announces the Fed Chair nominee around the time of the meeting, especially if the Fed holds rates steady, it could help the administration shape the policy narrative.
Trump has repeatedly criticized the Fed's policy stance and explicitly stated his intention to replace Powell, even though the current Chair's term lasts until May. Former Treasury Secretary Mnuchin has also hinted that the President's decision on a successor could be announced as early as this week, reinforcing market expectations of an accelerated timeline.
Market commentators point out that "bundling" the nomination announcement with the January meeting is strategically significant: if the Fed does not cut rates this week, the nomination news could shift market attention from the "current decision" to "future leadership and policy direction," thereby altering the market narrative. More broadly, analysts believe the announcement window could span the meeting itself or the following weeks.
Personnel background adds another layer of uncertainty. The term of Fed Governor Stephen Miran is reportedly set to expire this weekend, although he could remain in place until a successor is confirmed. It remains unclear whether the White House will nominate a new governor alongside the Chair announcement or handle the two decisions separately.
The White House declined to comment on the timing or sequence, but markets are increasingly focused on the political dimensions surrounding the Fed. Any move to accelerate the Chair nomination process could intensify debates about policy independence and inject additional volatility into interest rates, currencies, and equities at a sensitive time for monetary policy.
A remark from Trump sent the dollar tumbling. When asked on Tuesday if he thought the dollar had depreciated too much, Trump said its value was "fine." Although not a new stance, traders interpreted this as a signal that could encourage further selling pressure on the dollar, particularly as markets prepare for potential coordinated intervention by U.S. and Japanese authorities to stabilize the yen.
The U.S. Dollar Index, which measures the greenback against a basket of six major currencies, rose 0.25% to 96.16. On Tuesday, the index had fallen over 1%, hitting a four-year low.
The dollar's sharp decline pushed the euro above $1.20 (for the first time since 2021), and the Australian dollar briefly broke above $0.70, reaching a three-year high. Gold prices hit a fresh record high, simultaneously boosting dollar-denominated commodity prices.
Steve Englander, Head of G10 FX Research at Standard Chartered Bank's New York branch, said, "Officials typically push back against sudden currency moves, but when the President appears indifferent, or even seems to endorse the move, it gives dollar bears more confidence to continue selling."
Rob Kaplan, Vice Chairman at Goldman Sachs, pointed out that while a weak dollar benefits exports, the U.S. debt burden is approximately $39 trillion. With debt so large, currency stability becomes more important than exports. He stated in an interview in Hong Kong, "The U.S. would want a stable dollar, want to maintain stability, and want to be able to finance smoothly at the long end of the Treasury yield curve... A stable dollar helps."
Gold's rally surged past $5,300. Dollar weakness also spilled over to other assets, driving gold to a record high above $5,280 per ounce and pushing Brent crude futures to a four-month high, slightly above $68 per barrel.
Soojin Kim of Mitsubishi UFJ Financial Group noted that gold's surge "reflects rising geopolitical and economic risks, including U.S. policy changes and stress in major bond markets, which is driving the 'debasement trade' as investors seek safe havens amid increased volatility in traditional assets."
Following the dollar's sharp decline, silver prices extended their gains. Investors are shunning sovereign bonds and fiat currencies in favor of "hard assets."
Analysts at Saxo Bank stated, "Gold and silver continue their strong ascent, with the 'debasement trade' coming back into focus." They added that a new narrative element is that BlackRock's Rick Rieder—seen as supportive of more aggressive rate cuts—is now considered a leading candidate for the next Fed Chair.
Focus Stocks. Pre-market, memory chip stocks rose collectively. Seagate Technology surged over 10%, Western Digital gained 7.5%, SanDisk advanced 5.2%, and Micron Technology rose nearly 4%.
Starbucks shares jumped 10% pre-market after reporting first-quarter net revenue that exceeded estimates.
Texas Instruments rose over 7% pre-market, with both its Q4 2025 revenue and Q1 2026 guidance surpassing expectations.
AT&T shares climbed 3.4% in pre-market trading after the company issued an annual profit forecast above market expectations.
Intel continued its rise, up 4.8% pre-market, reportedly because Nvidia plans to shift some chip production to Intel's foundry services.
Broadcom advanced over 1% pre-market, with institutions forecasting it will lead the AI ASIC design market.
Regenxbio plummeted 32% pre-market after the FDA placed a clinical hold on its gene therapy trial.
C3.ai surged over 11% pre-market as it discusses a potential merger with Automation Anywhere.
Corning fell over 5% pre-market after initially rising more than 7%. Its Q4 core sales were $4.41 billion, versus an estimate of $4.36 billion, and core EPS was $0.72, compared to an estimate of $0.70.
Otis declined 5.3% pre-market after its fourth-quarter revenue missed expectations.
GE Vernova stock rose 6.5% in pre-market trading after the company raised its 2026 revenue forecast.
XPeng shares gained nearly 4% pre-market, with Vice Chairman Brian Gu predicting "very strong" growth this year.
UMC's U.S.-listed shares fell over 10% pre-market. UMC reported full-year 2025 revenue of NT$237.55 billion, a year-on-year increase of 2.3%.
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