News in Brief: Fed Holds Rates as Tech Earnings Drive Wall Street Higher

News in Brief: Fed Holds Rates as Tech Earnings Drive Wall Street Higher

Meta and Microsoft double down on AI, Tesla backs xAI and gold hits another record

Global markets were mixed to positive on Thursday as investors reacted to a US interest rate decision, a wave of big tech earnings and fresh moves in artificial intelligence. A strong rally in equities has continued, while gold extended its record-breaking run amid ongoing geopolitical uncertainty.

US Stock Futures Edge Higher

US stock futures moved modestly higher after a strong session on Wall Street.

Early trading showed:

• S&P 500 futures up around 0.2%
• Nasdaq 100 futures rising roughly 0.3%
• Dow Jones Industrial Average futures little changed

On Wednesday, the S&P 500 climbed above 7,000 for the first time ever, driven by optimism around artificial intelligence and expectations that interest rate cuts could still arrive later in the year. The index has gained close to 1,000 points since November 2024, supported by resilient economic data.

Federal Reserve Keeps Interest Rates Unchanged

The Federal Reserve left interest rates unchanged at 3.5%–3.75%, as widely expected.

Officials pointed to a stable labour market and continued economic strength. While two policymakers supported a small rate cut, the majority of the committee opted to hold steady.

Fed Chair Jerome Powell said further rate increases were not the base case, though they remain possible. He also suggested that the inflationary impact of recent US tariffs could fade over time.

Despite the steady tone, analysts at ING said the Fed’s more optimistic growth outlook suggests the recent rate-cutting cycle may be nearing its end. The US dollar continued to weaken following the announcement.

Meta and Microsoft Push AI Spending Higher

Artificial intelligence remained the dominant theme in earnings from major technology firms.

Meta Platforms reported record quarterly revenues and said it expects capital spending to rise as high as $135 billion this year, nearly double last year’s total. The strong results helped lift Meta’s share price after hours.

Microsoft also confirmed heavy AI investment, but its shares fell after investors focused on slightly slower growth in its Azure cloud division compared with the previous quarter.

Attention now turns to results from Apple, due later on Thursday.

Tesla Invests in Elon Musk’s xAI

Tesla reported better-than-expected fourth-quarter earnings, sending its shares up around 2.7% after hours.

A key highlight was Tesla’s decision to invest $2 billion in xAI, Elon Musk’s private AI company. Management described Tesla as transitioning from a carmaker into a “physical AI” business.

While automotive revenues fell 11% year on year, Tesla’s energy storage division posted record deployments. The company continues to face intense competition, particularly from China’s BYD.

Gold and Silver Extend Record Rally

Gold prices surged to a fresh record near $5,600 per ounce, supported by a weaker dollar and renewed geopolitical tensions. Silver also hit an all-time high above $119 per ounce, while copper prices reached record levels.

Analysts say gold is increasingly seen not just as a crisis hedge, but as a long-term store of value and diversification asset. Pullbacks have remained shallow, reflecting strong underlying demand.

Market Outlook

Markets remain driven by a powerful mix of AI optimism, solid economic data and geopolitical risk. With major tech earnings still to come and policy uncertainty lingering, volatility is likely to remain elevated — but for now, momentum remains firmly with risk assets.

Sources: (Fool.com, SKY.com, Investing.com)