S&P 500 and Nasdaq slip ahead of Fed decision, Nvidia slides: Live updates – CNBC

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The Dow Jones Industrial Average shed 136.83 points, or 0.31%, to 44,713.52.Nvidia shares hit their lows of the session after Bloomberg News reported Trump administration officials have discussed curbing chip sales of the company to China following the emergence of the DeepSeek AI model. Shares ended the session down 4%. For the week, the artificial intelligence darling is down more than 13%.The Fed left the federal funds rate in a range of 4.25% to 4.50%. The Fed’s postmeeting statement offered a more cautious view toward sticky inflation, providing investors with an explanation behind Wednesday’s interest rate pause.”The unemployment rate has stabilized at a low level in recent months, and labor market conditions remain solid,” new language in the statement said. “Inflation remains somewhat elevated.””The statement was a little hawkish, but policymakers are on hold with a long break until the March meeting. Data between now and then will set the tone for that next big decision,” said David Russell, global head of market strategy at TradeStation. “Today’s meeting is a non-event for Fed watchers. The central bank wants to be less of a factor over the next month as Trump takes the spotlight.”During a press conference that followed the decision, Fed Chair Jerome Powell said he has had “no contact” with Donald Trump since the newly inaugurated president told business leaders at the World Economic Forum in Davos, Switzerland, last week that he would demand the central bank lower interest rates. The two have had a contentious relationship dating back to Trump’s first term.A volley of Big Tech earnings are also due Wednesday afternoon, with Meta Platforms, Microsoft and Tesla issuing their quarterly reports.Stocks ended Wednesday in the red.The S&P 500 shed 0.47% and finished at 6,039.31, while the tech-heavy Nasdaq Composite slipped 0.51% to settle at 19,632.32. The Dow Jones Industrial Average lost 136.83 points, or 0.31%, closing at 44,713.52.— Lisa Kailai HanFollowing Monday’s global tech sell-off on the back of the DeepSeek developments, UBS’ Solita Marcelli said investors should be mindful of how they invest around artificial intelligence.The chief investment officer said to keep an eye on earnings results from companies in the tech sector and be ready to jump on any choppiness in the market. Marcelli also said traders should build out positions around longer-term growth areas with artificial intelligence, as well as in the power and resources space.”AI is here to stay, and if anything, DeepSeek reinforces that,” Marcelli wrote to clients. “However, the latest developments do also show that investment approaches that are too concentrated or overly passive can be risky, as value can quickly shift within the AI ecosystem. An active and diversified approach is a better way to gain exposure to AI, in our view.”— Alex HarringMonday’s technology rout further highlighted the bifurcation even within stocks at the top of the market, according to Mike Dickson, head of research and quantitative strategies at Horizon Investments.”With this AI theme, there’s going to be winners and there’s going to be losers. It’s a very powerful technology, and therefore you’re going to have some companies really benefit,” Dickson told CNBC in a Wednesday interview. “I think we’re going to see more and more of that as this theme matures.”Dickson added that he found it “worrisome” to not see a stronger bounce back in stocks that were hit especially hard on Monday, such as Nvidia and Broadcom.— Lisa Kailai HanStocks slipped on the Federal Reserve’s less-optimistic tone on inflation, which could be interpreted as a hawkish move from central bankers, according to Seema Shah, chief global strategist of Principal Asset Management.The December statement did not include that inflation “has made progress toward” the Fed’s 2% inflation goal.”The market is already jumping on the omission of inflation progress from the FOMC statement as a hawkish signal,” Shah said. “Certainly, the plateauing in inflation improvement means that a rate cut is currently not a desperate requirement, so a pause makes sense.”Shah added that the Fed’s tone could get more dovish if next month brings another soft inflation print, as well as a weakening in jobs growth.— Pia SinghShares of big and regional banks hit their lows of the session on Wednesday after the Federal Reserve kept its key interest rate unchanged at its latest policy meeting.The SPDR S&P Regional Banking ETF and the SPDR S&P Bank ETF dropped around 0.9% each. JPMorgan Chase and Bank of America pulled back 0.4% and 0.2%, respectively. Regions Financial shed 0.3%, and Huntington Bancshares fell 0.9%.— Hakyung KimStocks sat near the lows of Wednesday’s session as investors awaited Federal Reserve Chair Jerome Powell to begin his press conference scheduled for 2:30 p.m. ET.The Nasdaq Composite led the three indexes lower with a slide of 1.1% shortly after 2:20 p.m. ET. The Dow and S&P 500 were last down around 0.5% and 0.8%, respectively.— Alex HarringOn Wednesday, the Federal Reserve left its fed funds rate unchanged, as investors had largely expected leading up to the central bank’s January meeting. The benchmark overnight borrowing rate remains between a target range of 4.25% to 4.50%.Stocks pulled back in response, with the S&P 500 and Nasdaq Composite last respectively trading 0.8% and 1.1% lower. The Dow Jones Industrial Average lost 210 points, or 0.5%.— Lisa Kailai HanThere’s going to be more jitters in the market this year as tariff threats rise, but that doesn’t mean there isn’t room for gains for stocks, according to UBS.”While market volatility may increase, we believe the risk-reward for equities remains attractive, thanks to robust economic growth, AI tailwinds, and gradually falling yields,” Solita Marcelli, chief investment officer, Americas, wrote in a research note Wednesday.Marcelli forecasts around 9% upside for U.S. equities in 2025.— Hakyung KimRising short interest in exchange-traded funds that only invest in Treasury securities reflects “investor caution despite stable prices,” according to a research note from S3 Partners, which specializes in tracking short interest trends.Short interest in the iShares 20+ Year Treasury Bond ETF, for example has risen “as investors position for a potential reversal.” Similarly, short interest in iShares 7-10 Year Treasury Bond ETF has also increased, as has its implied volatility, “signaling concern about downside risk — this contradicts the Fedwatch tool’s outlook. The stock is unchanged month over month,” S3 said.The same trend is apparent in stocks, the researcher said. Short interest in the Financial Select Sector SPDR Fund is also higher, “reflecting financials’ sensitivity to the yield curve.”Wednesday’s Federal Open Market Committee’s “anticipated decision to maintain current rates aligns with market expectations but rising short interest in Treasury ETFs and growing sector-specific volatility reveal cautious sentiment,” according to the note. — Scott SchnipperShares of Starbucks were trading 7% higher on Wednesday after the coffee giant topped Wall Street’s estimates for its fourth-quarter earnings and revenue.Starbucks earned 69 cents per share on revenue of $9.4 billion in the last quarter. Analysts polled by LSEG had expected 67 cents in earnings per share on $9.31 billion in revenue. Investors were also optimistic after Starbucks CEO Brian Niccol said on CNBC’s “Squawk on the Street” that the company was starting to see progress in its turnaround plan.Starbucks’ Wednesday gains put the stock on track for its best day since Aug. 13, 2024. Shares also surged to their highest point since Nov. 16, 2023.— Adrian van Hauwermeiren, Lisa Kailai HanThese are some of the stocks moving midday:See the full list here.— Alex HarringDuring Wednesday’s trading session, 28 stocks in the S&P 500 reached new 52-week highs.Names that hit this milestone included:On the flip side, just three stocks were trading at their 52-week lows: Brown-Forman, Charles River Laboratories and General Dynamics.— Christopher Hayes, Lisa Kailai HanTreasury yields are little changed Wednesday morning ahead of the Fed decision, after moving lower in the days ahead of the central bank meeting.In late-morning trading, the 2-year Treasury yield was flat at 4.205%. The 10-year Treasury yield was down more than 1 basis point at 4.536%. Bond yields move opposite of price, and a basis point is equal to 0.01 percentage points.After spiking in early January, the 10-year Treasury yield is now back near where it was immediately after the Fed cut interest rates on Dec. 18. The 2-year yield is down from a level of about 4.357%.While traders and economists broadly expect the Fed to stand pat on Wednesday, the full-year outlook was more muddled. Fed funds futures pricing indicates at least two 25 basis point cuts this year as the most likely outcome, according to the CME FedWatch Tool. However, the tool shows there is still roughly a 28% likelihood of one cut, and an almost 10% possibility of zero cuts.— Jesse PoundFinancial stocks climbed on Wednesday, with the SPDR S&P Financial Sector Fund (XLF) notching a fresh all-time high. The XLF was last higher by about 0.6%.Specific stocks that hit fresh all-time highs on Wednesday include JPMorgan Chase, Wells Fargo and Bank of New York Mellon.— Brian Evans, Nick WellsEggs aren’t the only breakfast staple reaching record prices in 2025.March coffee futures touched a record $3.649 per pound on Tuesday, with traders focused “on the extent to which Brazil’s crop will be able to recover from last year’s dry weather,” Reuters said. The news agency reported Wednesday that coffee exports from India, the world’s seventh-largest coffee grower, are likely to drop more than 10% in 2025 “due to lower production and reduced carry-forward stocks from last season’s crop.”— Scott Schnipper, Gina FrancollaThe financial sector may look overbought, but Wolfe Research doesn’t expect a pullback anytime soon for the stocks.”While a breather is likely, the setup remains extremely strong for the sector to breakout to new highs,” wrote analyst Rob Ginsberg. “Can Fins keep up that momentum? We like their chances.”In the same note, Ginsberg pointed to Prudential Financial as an attractive stock to buy. The insurance company is next due to report earnings on Tuesday.— Lisa Kailai HanThe SPDR S&P Communications Services Fund (XLC) was last up 0.5% Wednesday morning and pacing for its eighth straight day of gains.The exchange-traded fund is leading the others this year, so far gaining 6.4% year to date. XLC hit its highest level since Dec. 12, 2024, and is now trading less than 1% from its all-time high.The sector’s leaders included T-Mobile, up 8% on Wednesday. The telecommunications giant hit its highest level since May 2021, while Fox, up 1.4%, reached a new all-time high. Shares of Warner Bros. Discovery, AT&T and Netflix respectively added 1.3%, 0.3% and 1.5%.— Nick Wells, Lisa Kailai HanStocks opened little changed to kick off Wednesday’s trading session.The S&P 500 slipped 0.2%, while the Nasdaq Composite shed 0.3%. The Dow Jones Industrial Average traded marginally lower.— Lisa Kailai HanHere are some stocks making big moves in premarket trading:Read the full list here.— Sean ConlonPiper Sandler expects another positive year for the stock market. In a Wednesday note, chief market technician Craig Johnson reiterated his S&P 500 year-end price objective of 6,600.This target is approximately 9% higher than where the benchmark closed on Tuesday.”The technical evidence of our sector, group, and trend work remains bullish, and we believe this bull market still has more room to run in 2025. At this time, our trend work suggests that SMID-Cap stocks offer the most compelling opportunities,” Johnson wrote, citing catalysts such as a robust labor market, artificial intelligence-driven productivity gains and a strong U.S. economy.Johnson also expects the Russell 2000 to outperform the 500-stock S&P this year.— Lisa Kailai HanPoint72′s Steve Cohen believes the bull market could see a tougher ride in the second half of 2025 as President Donald Trump’s aggressive trade and immigration policies may slow economic growth.The prominent hedge fund investor, who also owns the New York Mets, said tariffs would stoke inflationary pressures and hinder consumer spending, while an immigration crackdown could slow the supply of workers and cause the employment rate to go down.”I don’t think that’s a great backdrop in 2025,” Cohen said at the iConnections Global Alts conference on Tuesday. “I would expect the markets to top over the next couple months, if it hasn’t already topped already, and I would expect the second half to be a little tougher.”Despite his cautious view on the overall market near term, Cohen remains optimistic about investing around artificial intelligence in the decades ahead.— Yun LiCloud company Datadog is likely to see diminishing growth from its relationship with OpenAI, and that lowers the upside for the stock, according to Stifel.Analyst Brad Reback downgraded Datadog to hold from buy, writing in a note that the company could see slowing revenue growth and shrinking operating margins in 2025. Part of that is because of the company’s relationship with ChatGPT parent OpenAI.”While checks point to OpenAI renewing its DDOG contract for another year, we believe the company has been able to meaningfully optimize its DDOG usage, creating an appreciable growth headwind in FY25 that is likely felt most acutely in 1Q on a Q/Q basis,” Reback wrote.The analyst also said the stock, which is up 6% in January, has a “fairly full valuation.”Shares of Datadog were down 2% in premarket trading Wednesday.— Jesse PoundAlibaba shares popped 3% in the premarket Wednesday following the release of a new version of its artificial intelligence model Qwen that the Chinese tech giant said surpasses DeepSeek.”We have been building Qwen2.5-Max, a large MoE LLM pretrained on massive data and post-trained with curated SFT and RLHF recipes,” read a post on social media site X from Qwen. “It achieves competitive performance against the top-tier models, and outcompetes DeepSeek V3 in benchmarks like Arena Hard, LiveBench, LiveCodeBench, GPQA-Diamond.”— Sarah MinNvidia shares dipped 0.7% a day after the chipmaker rallied to recover some of the steep losses suffered on Monday. Week to date, the stock is down more than 9% after the DeepSeek-sparked sell-off to start the week.— Fred Imberton Monday. Week to date, the stock is down more than 9% after the DeepSeek-sparked sell-off to start the week.— Fred ImbertJapan and Australian stocks rose Wednesday as Wall Street rebounded overnight, while several Asia-Pacific markets were closed for the Lunar New Year holiday.Japan benchmark Nikkei 225 ended the day up 1.02% at 39,414.78, while the Topix advanced 0.68% to close at 2,775.59. Japanese tech stocks rebounded after posting losses for several days. Advantest gained 4.36%, Tokyo Electron rose 2.34% and SoftBank Group rose 2.43%.Minutes from the Bank of Japan’s December meeting released Wednesday showed members discussed neutral interest rates. The BOJ has been debating how far borrowing costs should be raised as inflation remains above its 2% target while wage hikes broaden due to labor shortages.Australia’s S&P/ASX 200 rose 0.57% to close at its highest since Dec. 5 at 8,447.The country’s inflation rose 0.2% in the December quarter and 2.4% annually, below the 2.5% estimated by economists polled by Reuters, data from the Australian Bureau of Statistics showed.— Amala BalakrishnerBroad stock market indexes would suffer in 2025 if Big Tech leaders continue to falter but the average stock is likely to “hold up well,” according to Capital Economics senior markets economist James Reilly.Although the S&P 500 Information Technology Index slid 5.5% Monday, its largest one-day decline since 2020, “the losses were largely confined to firms that had been expected to play a key role in facilitating AI, including semiconductor firms and utilities firms powering data centers,” London-based Capital Economics said, noting the S&P 500 only fell 1.5% and roughly 70% of companies in the index rose.One possibility is that investors will start to favor more of the users of artificial intelligence and fewer of the “enablers,” which may have already begun before Monday, Reilly wrote. “In this scenario, the S&P 500 could rally further even as sentiment towards these prior favorites cooled. Indeed, something similar happened during the dotcom bubble — there was a rotation within the I.T. sector (from the largest firms) around 1999/2000 that didn’t undermine the S&P 500 index.”Strangely, the large share of the market accounted for by the 10 biggest stocks offers some hope. “That might mean that the losses as these gains unwound would be similarly concentrated, affording plenty of scope for the average firm in the S&P 500 to do well if the economic backdrop stayed positive, as we expect,” Reilly noted.— Scott SchnipperCheck out some of the companies making headlines in extended trading:Read the full list here.— Brian EvansStock futures were marginally lower on Tuesday as investors look toward the first Federal Reserve interest rate decision of 2025.Futures tied to the Dow Jones Industrial Average ticked down 23 points, or 0.05%. Nasdaq 100 futures pulled back 0.1% alongside S&P 500 futures.— Brian EvansGot a confidential news tip? 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