U.S. stocks ended Wednesday little changed after the Federal Reserve’s first FOMC meeting of 2026, as investors digested Chair Jerome Powell’s comments on interest rates, Fed independence, and leadership succession ahead of major Big Tech earnings.
The Dow Jones Industrial Average edged up 12 points, the $S&P 500(.SPX)$ finished essentially flat, and the Nasdaq Composite gained 0.2%, supported by strength in technology stocks ahead of earnings releases after the market close.
Fed Pauses After Prior Rate Cuts
As widely expected, the Federal Reserve held interest rates steady following its January policy meeting. Powell emphasized that the current stance of monetary policy remains appropriate after a cumulative 75 basis points of rate cuts over the previous three meetings.
“Having lowered our policy rate by 75 basis points over the course of our previous three meetings, we see the current stance of monetary policy as appropriate to promote progress toward both our maximum employment and 2% inflation goals,” Powell said during Wednesday’s press conference.
Market participants broadly interpreted the pause as a sign of economic stability, though expectations remain that rates will eventually move lower, depending on incoming data.
Focus Shifts to Powell’s Future and Fed Independence
Fed Independence
Powell’s term as Fed chair ends in May, while his term as a member of the Board of Governors runs through January 2028.
Powell did, however, offer advice to the next chair: “Stay out of elected politics.”
That remark comes amid heightened scrutiny of the Fed’s independence, as the Trump administration has publicly pressured the central bank to cut rates more aggressively. Earlier this month, the Justice Department launched a criminal investigation into Powell, a development that has raised concerns among Fed watchers.
While Powell declined to comment on the investigation, he reaffirmed the Fed’s institutional autonomy.
“We haven’t lost it, I don’t believe we will,” Powell said, referring to the central bank’s independence.
Markets Look Past the Fed to Big Tech Earnings
With the Fed decision largely priced in, investor attention quickly shifted to Big Tech earnings released after the close.
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$Tesla Motors(TSLA)$ announced a $2 billion investment in xAI, deepening ties between the automaker and Elon Musk’s artificial intelligence venture. Tesla also said it plans to end production of its Model S and Model X vehicles in early 2026. While operating profit fell 11% year over year, the company still topped analysts’ expectations, aided by cost controls and regulatory credit sales.
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$Meta Platforms, Inc.(META)$ , $Microsoft(MSFT)$ , and $IBM(IBM)$ all beat Wall Street estimates, with strong AI-related growth highlighted across results. Shares of Meta and IBM surged in late trading, while Microsoft shares slipped.
The market reaction to these earnings could help determine near-term direction for the Nasdaq Composite and broader equity markets.
AI and the Workforce Remain a Key Theme
Also drawing attention, Amazon announced plans to cut 16,000 jobs, bringing total layoffs since October to roughly 30,000, or about 10% of its corporate workforce. Most cuts are expected in AWS, Prime Video, and human resources, underscoring how AI-driven efficiency is reshaping corporate labor needs.
Market Snapshot
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Hot stock: $Seagate Technology PLC(STX)$ (+19.1%)
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Biggest loser: Carvana (-14.2%)
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Best sector: Energy (+0.7%)
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Worst sector: Real Estate (-0.9%)
Bottom Line
The Fed’s rate pause offered little immediate direction for markets, leaving stocks largely unchanged. With Big Tech earnings rolling in and questions lingering around Fed leadership and independence, investors remain focused on whether strong corporate results, and clarity from policymakers, can reignite momentum in the weeks ahead…
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This summary is for informational purposes only and does not constitute financial advice. Investors should conduct their own research before making investment decisions.
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