To The Moon

Tesla, Bitcoin, S&P 500, Dow, Tank: Thanks A Lot FOMC 

The Dow reversed its gains for the day after the FOMC released a decision to cut target rates by 25 basis points. The rate cut was expected, but the Fed's dot plot and economic projection were worse than last time: the committee only expects two cuts next year and a PCE inflation rate to fall to 2.5% by the end of 2025, instead of the previously hoped for 2.1%.

Overall, the market generally tanked on Wednesday. After 4 pm ET, the $S&P 500(.SPX)$   fell 2.95%, the $DJIA(.DJI)$   fell 2.58%, and the $NASDAQ(.IXIC)$   fell 3.56%.

The Federal Open Market Committee lowered the target federal funds rate by 25 basis points and forecast a slower pace of reductions next year as policymakers raised their inflation outlook. 

The target rate was lowered to a range of 4.25%-4.5% Wednesday, the Federal Reserve said in a statement Wednesday at the end of policymakers' two-day meeting. While the previous decision to lower rates was unanimous, this time around, Federal Reserve Bank of Cleveland Beth M. Hammack voted against the move, preferring instead to hold the benchmark borrowing cost steady at 4.5% to 4.75%. 

The committee's so-called dot plot, which illustrates the forecast by members of the FOMC, showed the median fed funds rate outlook at 3.9%, implying expectations of two cuts of 25 basis points each by the end of 2025. That compares with their previous median outlook that called for a rate of 3.4%. 

Healthcare plans as an investing theme tracked by moomoo climbed, after in part news from $Pfizer(PFE)$  's forward full-year guidance call Tuesday, where Cheif Albery Bourla told Chris Shibutani, a Goldman Sachs Analyst, that Pfizer spoke with President-Elect Trump, and expects the incoming administration to cut down on drug prices and pass savings along to the consumer, removing Pharmacy Benefit Managers (PBMs) effect on prices. PBMs are the middlemen between insurance providers and manufacturers. 

"The President has very strong views, as he articulated recently and before, from his first term for the middleman, the PBMs, that he wants transparency. It's very clear," Bourla said. "That savings, even more importantly, will pass to the patients, and they will see a dramatic reduction in the cost they are experiencing with their medicine. See what happens."

Elsewhere in the economy, $Crude Oil Futures(FEB5) (CLmain.US)$ fell, gold and silver fell, treasuries climbed, and long-term yields climbed. Bitcoin fell but stayed over $104k. 

$NVIDIA (NVDA.US)$ and $UnitedHealth (UNH.US)$ were leading the Dow higher, up 4%, 3%. Nvidia pulled back after Broadcom led the chip stock sector to rise for days after its earnings report beat estimates last week. UNH, meanwhile, took a hit after its leadership was attacked. Both stocks are regaining that ground. Of course, after the FOMC decision, Nvidia fell.

$Jabil (JBL.US)$ led the S&P 500 higher as the top percentage gainer, up 7% after the firm posted a Q1 decline in revenue but boosted its FY 2025 revenue and earnings guidance. The firm makes plastic parts, for manufacturing and logistics, and pulled in $1.4B less revenue in the recent quarter than a year ago. 

$Micron Technology (MU.US)$ fell 10% after reporting its Q1 2025 adjusted earnings beat estimates, but its sales came in lower, and the firm projected guidance for Q2 below estimates.

$Tesla (TSLA.US)$'s market value continued its post-election rally this week, hitting an all-time high of $1.5 trillion before dropping like a rock. It hit a new height of $488/share. The EV firm is up nearly double the price it traded at on election day.

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