US futures

Dow future 0.01% at 44723

S&P futures 0.44% at 6062

Nasdaq futures 0.57% at 21528

In Europe

FTSE 0.63% at 8610

Dax  0.64% at 21681

• The Fed leaves rates unchanged & is in no rush to cut
• Q4 GDP was weaker than expected at 2.3%
• Meta & Tesla rise post earnings, Microsoft falls
• Oil falls as inventories rise & on trade tariff worries

Fed leaves rates unchanged, GDP misses

The S&P 500 and Nasdaq 100 are heading higher after the Federal Reserve left interest rates unchanged and amid a post-earnings boost from mega caps Meta and Tesla.

The Federal Reserve held interest rates unchanged on Wednesday at 4.35%—4.5%, as expected. The Fed noted the solid US economy and resilient labour market and acknowledged a lack of progress toward the 2% inflation target. Federal Reserve chair Jerome Powell said there was no rush to cut rates again until inflation and jobs data made it appropriate. The slightly more hawkish stance is overshadowed by mega-cap earnings and mixed US data today.

Q4 GDP came in lower than expected, supporting the view that the Fed may need to ease again should GDP growth continue to slow. Q4 GDP was 2.3% annualised, down from 3.1% in Q3 and below forecasts of 2.6%. Meanwhile core PCE rose 2.5% on a quarterly basis, in line with consensus. Meanwhile, best jobless claims unexpectedly improved to 207 K from the previous 223K, highlighting ongoing residents in the US labour market.

 Earnings continue to ramp up, with mega caps Meta, Tesla, and Microsoft starting Magnificent 7 earnings yesterday. Apple and IBM are due later.

Corporate news

Meta is rising premarket after posting Q4 earnings of $8.02, ahead of forecasts of $6.76, as sales grew 21% to $48.4 billion. Q1 revenue forecast missed estimates, and CEO Mark Zuckerberg defended AI spending to maintain competitiveness in the AI race.

Tesla is rising after posting Q4 adjusted earnings of $0.73, missing estimates of $0.77. Sales rose 2% to $25.7 billion, short of expectations of $27.3 billion. The gross profit margin was also down to 16.6% from 20.1%. However, the share price is rising on optimism surrounding 20 to 30% growth this year, amid hopes of a cheaper model.

Microsoft is under pressure as fiscal Q2 earnings and revenue beat Wall Street estimates, but 31% growth for the Azure cloud computing business missed expectations of 32%. Capital expenditures were $15.8 billion higher than the $15.6 billion expected and well ahead of the $9.7 billion a year earlier. The earnings come as spending comes under the spotlight following DeepSeek’s unveiling of a cheaper model earlier in the week.

Apple is under the spotlight as the iPhone maker is due to report after the close. Expectations are for EPS of $2.35 on $124.03 billion in revenue. The stock managed to avoid the DeepSeekI sell-off at the start of this week, as cheaper AI models mean lower costs. However, Apple is trading down from its all-time high after broker downgrades in recent weeks amid concerns that it will miss earnings due to weak iPhone sales. Global iPhone shipments are down 5%.

Nasdaq 100 forecast – technical analysis

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The Nasdaq 100 continues to hold above the 50 SMA, extending its recovery from 20,630 on Monday. The RSI is neutral. Buyers will look to extend gains towards 21,900 the 2025 high, before looking to 22,100 and fresh record levels. Support is seen at 21,250, the 50 SMA and below here 21,750 comes into play. A break below here is needed to create a lower low.

FX markets – USD rises, EUR/USD falls

USD is rising, adding to yesterday’s gains after the Fed left rates on hold and adopted a slightly more hawkish stance owing to solid growth and sticky inflation.

EUR/USD is unchanged at around 1.04 after the ECB cut rates for a fifth time, reducing by 25 basis points to 2.75%. The move was fully priced in, and attention now turns to ECB President Christine Lagarde’s press conference.

GBP/USD is unchanged in a quiet day for UK economic data. Chancellor Rachel Reeves's growth initiatives yesterday failed to spur GBP demand. Attention is turning to the BoE rate decision, where the BoE will likely cut rates and point to further rate reductions.

Oil falls further with trade tariffs & inventories in focus

Oil prices are extending declines from yesterday after crude oil stockpiles rose by more than expected and as attention remains on U.S. President Trump's tariff threats against Mexico and Canada. These are two of the largest suppliers of crude oil to the US.

Earlier in the week, the White House reaffirmed Trump's plans to impose a 25% tariff on imports from Canada and Mexico. However, these could still be avoided if they closed their borders to fentanyl. Given the recent selloff declines, Trump's trade tariffs have been priced in.

Separately, crude oil stockpiles in the US rose by 3.5 million as refiners cut production as winter storms hit.

Attention will turn towards OPEC's meeting scheduled for February 3rd, where they will discuss oil production. This comes as Trump plans to increase U.S. oil production.