Stock Futures Mixed; Dow Edges Up, S&P 500 Slips After Setting Closing Highs; Nasdaq Falls as AI Bubble Fears Remain

Leadership Change Looms Over the Fed’s Latest Interest Rate Decision

1 minute ago

Everything the Federal Open Market Committee said and did at its meeting Wednesday came with a huge asterisk: New leadership could push the central bank to move its key interest rate in a different direction in a few months. 

The Fed’s policy committee voted to lower the fed funds rate by a quarter point this week for the third consecutive meeting, aiming to stabilize the faltering job market by reducing borrowing costs. It was one of the last scheduled meetings of the Federal Open Market Committee before Chair Jerome Powell’s term ends in May, and investors and economists have been speculating about what direction the central bank will take under new, Trump-appointed leadership.

That fact came up several times at Wednesday’s post-meeting press conference. A question about whether the impending end of his term hindered Powell’s ability to do his job or change his thinking prompted his shortest answer of the conference: “No.”

Nonetheless, the leadership change complicates Powell’s job of informing the public about the future course of the federal funds rate, which affects borrowing costs on all kinds of loans.

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–Diccon Hyatt

Inflation Worries Keep the Fed on Alert. Could This Mean No More Interest Rate Cuts Anytime Soon?

44 minutes ago

Inflation is likely to get worse before it gets better, and the Federal Reserve will be keeping a close eye on prices and tariffs next year before making its next move on interest rates, Fed Chair Jerome Powell warned Wednesday.

“In the near term, risks to inflation are tilted to the upside and risks to employment to the downside, a challenging situation,” Powell said after the Fed moved to reduce interest rates for the third straight meeting.

While the Fed sees inflation moderating overall next year, price pressures could remain high as the impact of President Donald Trump’s tariffs is just beginning to be felt, Powell said. “What’s happening here is services inflation coming down, and that’s offset by increases in goods, and that goods inflation is entirely in sectors where there are tariffs,” Powell said. 

According to the Summary of Economic Projections released Wednesday, Fed officials see the Personal Consumption Expenditures (PCE) price index, the central bank’s preferred inflation gauge, falling to 2.4% in 2026, compared to the September forecast of 2.6%. The projection for “core inflation,” which excludes volatile food and energy costs, is also down slightly.

But before that, inflation could move higher, Powell warned, as it can be nine months or more before Trump’s tariffs can be fully factored into prices. The U.S. initiated a round of “reciprocal tariffs” in early August that raised import taxes on a number of trading partners.

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–Terry Lane

Broadcom Turned In Strong Earnings. But Will They Revive the AI Trade?

1 hr 14 min ago

The AI trade has sputtered lately. Investors looking for Broadcom’s latest quarterly results to get it running again have been disappointed so far.

Shares of chipmaker Broadcom (AVGO) first jumped in extended trading Thursday, rising after it posted results that topped analysts’ estimates on growing AI demand. That was welcome for bullish investors who saw the Nasdaq and many of the Dow’s tech-focused components left out of today’s market surge.

Not long after, however, they were in the red again, extending losses from the regular session—and suggesting that the latest tech selloff, led by database giant Oracle (ORCL) after it failed to impress investors with its own results, might not be done.

Oracle slightly missed Street sales estimates. But Broadcom topped forecasts with a 28% year-over-year jump in quarterly revenue to a record $18.02 billion. It also posted adjusted earnings per share of $1.95 for the fiscal fourth quarter, above the $1.88 analysts surveyed by Visible Alpha were looking for.

CEO Hock Tan said the supplier for Meta (Meta) and Alphabet’s (GOOGL) Google sees that momentum continuing in the current quarter, and projected first-quarter revenue of $19.1 billion, ahead of analysts’ estimates.

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–Kara Greenberg

Stock Futures Mixed to End Week

1 hr 34 min ago

Futures contracts connected to the Dow Jones Industrial Average pointed 0.2% higher.

S&P 500 futures ticked 0.1% lower.

Nasdaq 100 futures pointed down 0.5%.