TRADING DAY Fed almost incidental to market swirl

• Fed kept rates unchanged with traders expecting another quarter-point cut by July; policymakers reaffirmed 'strong dollar' policy amid currency volatility
• Tech sector showed mixed results: Meta surged 10%, Microsoft gained 4%, and Tesla jumped 11%, though companies announced significant layoffs tied to AI productivity gains
• Gold hit a fresh 4-month high while silver rose 3%; Treasury yields increased up to 3 basis points as the curve bear steepened

Market Summary: Fed Holds Rates as S&P 500 Breaks 7,000

Key Market Events:

The Federal Reserve kept interest rates unchanged on January 28, 2026, while flagging rising inflation risks. Despite market volatility, the S&P 500 broke above 7,000 points for the first time. The Fed's stance was described as "hawkish" with Chair Jerome Powell noting inflation remains elevated and the job market appears resilient.

Market Movements:

• Equities: S&P 500 surpassed 7,000; South Korea and Brazil rallied to new peaks
• Tech Earnings: Meta surged +10%, Microsoft +4%, Tesla +11% following quarterly results
• Currency: Dollar posted its best day since mid-November; yen experienced worst day since August
• Commodities: Gold hit 4-month highs, surging +4% through $5,300/oz; silver gained +3%
• Bonds: Treasury yields rose up to 3 basis points with curve bear steepening

Policy Outlook:

Traders expect another quarter-point rate cut by July, though further cuts remain uncertain. Powell indicated current policy sits at the higher end of the neutral range, but dismissed rate hikes as anyone's "base case."

Dollar Concerns:

A "Sell America" narrative is gaining momentum, prompting U.S. officials including the President and Treasury Secretary to reaffirm the "strong dollar" policy. The dollar remains overvalued on fundamental measures, with continued volatility expected.

Tech Sector:

Three of four major tech earnings impressed investors (Meta, Tesla, IBM), while Microsoft disappointed. However, concerns emerged over AI-driven job losses and tech stocks' underperformance relative to all-time highs.

Upcoming Catalysts:

Thursday brings a packed schedule including Apple, Visa, Mastercard earnings, plus key economic data on jobless claims and durable goods.