The Federal Reserve’s January meeting minutes, where interest rates were maintained at 4.25% to 4.5%, are eagerly awaited by investors and will be released on Wednesday. This anticipation comes as the U.S. market remained closed on Monday for Presidents’ Day, during which Fed Governor Christopher Waller expressed that President Trump’s new tariffs are expected to have minimal influence on prices. Philadelphia Fed President Patrick Harker also mentioned there is no immediate necessity to alter the current interest-rate policy.
Despite the Fed’s steady interest rates, Fed Chair Jerome Powell’s recent testimony, paired with consumer and producer price data, has stirred uncertainty about potential rate cuts this year. Traders currently predict a 25-basis-point cut, with a possibility of a second cut before December, as per LSEG data. Mark Haefele, CIO at UBS Global Wealth Management, noted that with the Fed still seeing its policy as restrictive, easing is anticipated in the latter half of 2025 as inflation moderates.
Last week’s disappointing retail sales data, which helped lower Treasury yields, likely supports expectations for reduced borrowing costs this year. The main stock indexes on Wall Street noted gains despite global market volatility, spurred by tariffs on U.S. steel and aluminum imports under Trump, which led to fluctuating market conditions. As of last Friday, the S&P 500 was very close to its peak from four weeks prior.
The prospect of a peace agreement between Russia and Ukraine also lifted global risk-taking, enhanced by talks between Russian and U.S. officials in Saudi Arabia. In premarket activities, Dow E-minis gained 10 points, S&P 500 E-minis added 15 points, and Nasdaq 100 E-minis rose by 76.25 points.
Throughout this week, earnings season winds down with Walmart’s earnings expected to provide insights into U.S. consumer health. More than 380 S&P 500 companies have already reported earnings, which are forecasted to show a 15.3% growth year-over-year. This is a substantial rise from the sub-10% growth anticipated earlier in 2025.
Notably, significant premarket movements included a 1% rise for Tesla, a 5.2% jump for Intel amidst speculative industry news, and a 9.3% increase for Constellation Brands following a new investment announcement by Buffett’s Berkshire Hathaway.
The current market dynamics highlight investors’ keen interest in the Federal Reserve’s next moves, with potential rate cuts being a focal point. As economic indicators continue to shape expectations, market participants remain vigilant to adjust their strategies accordingly.
