January 29, 2025

Markets:

S&P 500 futures slipped on Wednesday as investors turned toward the first Federal Reserve interest rate decision of 2025.

Tech stocks on Tuesday led the S&P 500 higher and brought the Nasdaq Composite to a 2% gain. The two indexes made a comeback after incurring sharp losses on Monday in a sell-off spurred by the emergence of China’s DeepSeek and the threat it poses to the artificial intelligence trade. Nvidia, which suffered a roughly 17% decline Monday, jumped nearly 9% on Tuesday.

Shares of the chipmaker stock were last trading 2% lower on Wednesday morning. Investors waited to see if Nvidia’s comeback from Monday’s rout could continue after Tuesday’s gain, or if DeepSeek’s emergence has fundamentally impaired the overall AI trade.

The Fed’s interest rate decision on Wednesday is now a focal point for investors, as well as Fed Chair Jerome Powell’s press conference. Fed funds futures data reflect a nearly 100% certainty that the central bank will keep rates steady at a target range of 4.25% to 4.5%, according to CME Group data.

Investors will be paying especially close attention to Powell’s comments — his first press conference in President Donald Trump’s second term. The two have had a contentious relationship dating back to Trump’s first term. The president has already said he would “demand that interest rates drop immediately.”

A volley of Big Tech earnings are due Wednesday afternoon, with Meta Platforms, Microsoft and Tesla issuing their quarterly reports.

Portfolio:

What a day yesterday! Hope the navigation on Monday helped and once again we were presented with an opportunity few understood and took advantage of. It still amazes us the narratives at times that get pushed to try and push specific sectors lower for a short time frame. Someone made a ton of money on the drop and pop. But we move forward now and move into a session we've been looking forward too for the last few weeks. Such a critical day with FOMC – will Powell speech play nicely into President Trump or will he be defiant? We also have monster slate of earnings tonight that will be key drivers to the market and their sectors. ASML delivered this morning for the chip sector. It's interesting to see how flow is created from it. We can't see much movement today in front of Powell and the earnings tonight. We are perfectly fine holding our setups (S, HIMS, and AAPU). The risk / reward at this point makes sense.

We have a few developments taking place with NDX leading a breakout now – could expand greatly should the next two days of earnings deliver. Remember what we stated on Monday – we just need 2 of the top 4 to release and guide with a monster outlook. That sets the tone / runway for Q1.

Please remain patient today! At times this is the best trade and allow price to come to us. If we see something that is an A+ setup in front of these events today, we will send it off. Be ready.