To The Moon

The Federal Reserve's policy committee opted to maintain interest rates at their current levels during yesterday's session, in line with expectations.

The Federal Open Market Committee (FOMC) unanimously decided to keep the target range for the federal-funds rate at 5.25%-5.50%.

Federal Funds Effective Rate

FF rate

Chairman Jerome Powell's remarks following the decision suggested a cautious approach to potential rate cuts, acknowledging the need for more evidence of inflation moderation before considering a shift in monetary policy.

DJIA: -0.82% to 38,150.30 - S&P 500: -1.61% to 4,845.65 - Nasdaq: -2.23% to 15,164.01

Market Scenario

Market reactions to the FOMC decision were notable, with stocks and bonds experiencing declines.

The $S&P 500(.SPX)$ , Dow Jones Industrial Average, and Nasdaq Composite all recorded losses, with the Nasdaq suffering its worst one-day decline in over a year.

The tech sector, in particular, faced pressure, with mega-cap stocks like $Alphabet(GOOG)$ , $Microsoft(MSFT)$ , and Advanced Micro Devices witnessing significant drops following their earnings reports.

Despite these short-term fluctuations, investors are urged to focus on long-term trends, especially in the technology sector, where strong convictions regarding future AI demand persist.

BOA

$Apple(AAPL)$ , $Amazon.com(AMZN)$ , and $Meta Platforms, Inc.(META)$ : Three more "Magnificent Seven" members report quarterly results Today.

$META $AAPL $AMZN

Tesla, Microsoft, and Alphabet all saw shares drop in response to their results posted over the last week. Apple, which faces numerous issues including slumping iPhone demand, has lowered expectations while Amazon shook up its streaming offering. Meta will look to show off a healthy ad business and its efforts to monetize AI after a superb 2023 for the stock.

Conclusion

Chair Powell's comments and the market's response underscored the ongoing debate between hawks and doves regarding the timing of potential rate cuts. While the Fed signaled openness to adjustments in the future, the emphasis remains on economic data and inflation trends. The market's reaction, characterized by heightened volatility and declines in equities, reflects uncertainty surrounding the Fed's stance and its implications for economic growth.

Looking ahead, Friday's Jobs Report will provide further insights into the state of the economy and the potential trajectory of monetary policy.

*Disclaimer: The information provided is based on available data and market analysis as of the time of writing, and future market movements may vary.*

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