US stocks open flat after Big Tech earnings, Fed decision: S&P below 7,000

• Meta Platforms surged 9% on strong advertising revenue and AI investment guidance, while Microsoft dropped sharply after reporting slowed cloud growth and softer operating margin guidance for Q3
• The Fed maintained rates with two governors dissenting in favor of cuts; markets now price in two quarter-point cuts by end of 2026, but expect rates to hold steady through Powell's May term conclusion
• Political risks emerged from a DOJ investigation involving Fed Chair Powell and efforts to remove Governor Lisa Cook, raising concerns about central bank independence alongside potential US strikes against Iran

Market Summary: US Stocks Flat After Tech Earnings and Fed Decision

Key Market Movements

US stocks opened mixed on Thursday, January 29, 2026, with the S&P 500 up 0.1% (trading below 7,000), Dow Jones adding 16 points, and Nasdaq declining 0.1%. Markets digested major tech earnings and the Federal Reserve's latest policy decision.

Technology Sector Divergence

Winners:

• Meta Platforms surged 9% following strong earnings results and optimistic advertising demand outlook
• Tesla gained 5% on positive earnings performance

Losers:

• Microsoft fell sharply after reporting slower cloud growth in fiscal Q2 and issuing weak operating margin guidance for Q3, raising concerns about Big Tech growth engines

Pending: Apple's earnings report after Thursday's close is viewed as a critical test of consumer demand and tech sector health.

Federal Reserve Decision

The Fed maintained its benchmark rate at 3.5%-3.75% as expected. Key takeaways:

• Economic activity expanding at "solid pace"
• Inflation remains above 2% target
• Chair Jerome Powell emphasized cautious approach given elevated inflation
• Two governors (Miran and Waller) dissented, favoring a 25 basis-point cut
• CME FedWatch Tool indicates markets pricing in two quarter-point cuts by end of 2026

Additional Risk Factors

• Political uncertainty: DOJ criminal investigation involving Powell and efforts to remove Fed Governor Lisa Cook raise concerns about Fed independence
• Geopolitical tensions: Reports of potential US strikes against Iran add to global instability concerns

Other Notable Moves

Caterpillar declined following its earnings report.

Markets remain cautious amid mixed earnings signals and policy uncertainty.