To The Moon

The stock market have the trading showing little conviction as investors awaits the FOMC policy decision at 2pm ET, and follow by the Fed Chair’s press conference at 2.30pm ET.

The stock market ended the session with mixed performance on Wednesday (29 Jan). Stocks closed lower Wednesday after the Federal Reserve left its influential interest rate unchanged amid persistent inflation, as investors prepared for a slew of earnings reports from major technology companies. 

The S&P 500 and Nasdaq Composite each fell 0.5%, while the Dow Jones Industrial Average slipped 0.3%, as all three indexes rebounded from deeper declines in the minutes after the Fed's announcement. Stocks have been on a rollercoaster ride this week, posting big gains on Tuesday after recording steep losses to start the week amid concerns about the competitive threat posed by Chinese AI startup DeepSeek.

The FOMC unanimously decided to maintain the target range for the fed funds rate at 4.25-4.50%, which was anticipated by the market. The directive's language was adjusted to omit the statement that "Inflation has made progress toward the Committee's 2 percent objective."

Instead, it stated that "Inflation remains somewhat elevated." This change was expected as the market anticipated the Fed's cautious stance amid evolving economic and labor market conditions. Fed Chair Powell reiterated this cautious approach, noting, "The broad sense of the Committee is that we don't need to be in a hurry to adjust the policy stance." Despite some volatility in stocks and bonds following these announcements, markets ultimately remained stable, indicating no unexpected developments from the decision or Powell's comments.

S&P 500 Communication Services Sector Led The Pack With Modest 0.31%

Only four sectors managed to finish the session in the green, with Communication Services modest gain of +0.31%, and the range of gains is modest from +0.18% to +0.31%.

Note Yield Lower After Interest Rates Remain Unchanged

The yield on the 10-year Treasury, which correlates with expectations about where interest rates are headed and affects borrowing costs on a range of loans, was at 4.53% down from 4.55% at Tuesday's close.

Stocks To Watch

$Tesla Motors(TSLA)$ saw its shares decline in after-hours trading following its Q4 earnings report, which missed analyst expectations. The electric vehicle maker reported a 2.1% increase in revenue year-over-year to $25.7 billion, but EPS fell short at $0.73 compared to the $0.77 consensus. The operating margin notably decreased to 6.2% from 10.8% in the previous quarter. Despite an increase in adjusted EBITDA to $4.9 billion, the company experienced less cost-reduction benefits than anticipated.

Microsoft (MSFT) shares dropped 3% in late trading after its fiscal second-quarter results showed Azure cloud unit growth below forecasts, despite overall earnings surpassing expectations. The tech giant reported a 12% rise in revenue to $69.6 billion, with Azure revenue growing 31% year-over-year. However, the company anticipates increased capital spending in the future, which may have concerned investors.

ServiceNow (NOW) experienced a 9% decline in shares during post-market trading due to disappointing forecasts for the first quarter and full-year 2025. The company's Q4 revenue of $2.96 billion matched estimates, but its subscription revenue forecast fell short of expectations, indicating potential challenges in meeting growth targets.

$Lam Research(LRCX)$ saw a 7% increase in its shares after reporting strong second-quarter results that exceeded Wall Street's expectations. The semiconductor equipment firm posted a 14.6% year-over-year revenue increase to $4.38 billion, with both adjusted gross and operating margins surpassing estimates, highlighting the company's robust performance in the semiconductor manufacturing sector.

If we looked at the technicals, we are seeing a very nice move above the 50-day MA to form a bullish reversal as LRCX remained traded between 50-day and 200-day MA, though we are seeing MACD giving a downside movement, this might be a good opportunity to look at loading LRCX.

The MTF is giving a down trend, but this might change after strong earnings report from LRCX, this would depend on how the bulls would be navigating a daily uptrend expansion, and if they were to succeed, we might see a strong upside for weeks to come for the first quarter.

$ASML Holding NV(ASML)$ saw its shares rise nearly 5% as its CEO Christophe Fouquet reassured investors that advancements in AI models would not negatively impact chip equipment manufacturers. Despite potential efficiency gains in AI models, the demand for advanced processing and high-power computing remains strong, supporting ASML's market outlook.

$Meta Platforms, Inc.(META)$ is considering integrating the Chinese AI model DeepSeek into its generative AI tools for advertisers. This move comes as some advertisers expressed dissatisfaction with the accuracy of Meta's AI-generated content, prompting the company to explore external models to enhance performance.

META is having a very good upside movement as seen from the technicals, it looks like we might be seeing a strong upside movement supported by a strong upside from MACD.

And the MTF strong uptrend is also giving investors the confidence, together with META strong earnings, this would put META for a longer period of upside.

Summary

I would think that that market might still be trading in mixed mode, as there are some sectors who will be more receptive for interest rates unchanged. There will be more tech earnings coming up and hence, we might see the information technology sector recovered.

NASDAQ would need some catalyst from the tech earnings and hopefully we can get some confidence back from big tech names.

Appreciate if you could share your thoughts in the comment section whether you think market would continue to trade in a mixed performance or we would see a surprise rally.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.