Fed holds rates steady while META hits all time highs

The Federal Reserve (Fed), which is the central bank of the United States, decided to keep interest rates the same at 4.25%-4.50% on Wednesday. This means borrowing costs for things like mortgages, credit cards, and business loans won’t change for now. It’s the first time the Fed has paused after cutting rates three times since September 2024.

This decision comes as President Donald Trump, now back in office, has been pushing for lower interest rates to help the economy grow. But the Fed is being careful. While the job market remains strong, inflation (the rising cost of goods and services) is still above their 2% goal. Fed Chair Jerome Powell made it clear that they won’t cut rates again unless inflation drops further or the job market weakens.

How the Market Reacted & What’s Next

Since the Fed’s decision was widely expected, there weren’t any big surprises. However, their statement did reinforce that the labor market is still doing well and inflation remains "somewhat elevated" (meaning prices are still rising more than they’d like).

Powell reassured investors that jobs aren’t the main reason inflation is high. He also reminded everyone that the Fed still plans to cut rates only twice in 2025 and twice again in 2026. Investors had already adjusted their expectations to this, so stock prices only dipped slightly. But market reactions can take time, so traders should keep an eye on things over the next few days.

Big Company Earnings: Tesla, Microsoft & Meta

Several major companies released their earnings reports, which show how well they performed last quarter. Here’s a breakdown of three key players:

• 🚗 Tesla: The electric car company reported lower-than-expected earnings and revenue. Overall revenue was up 2% from last year, but sales from cars dropped 8%. High financing costs (more expensive car loans) and competition hurt Tesla’s sales, leading to its first yearly drop in vehicle deliveries. To keep investors excited, Tesla is shifting focus to self-driving technology and robots. Despite mixed results, Tesla’s stock went up 6% after hours.
• 💻 Microsoft: The tech giant made more money than expected, but its cloud computing division (which includes Azure, a service that helps businesses store and process data online) grew slower than hoped. Microsoft’s artificial intelligence (AI) business is booming, making over $13 billion a year. However, their heavy investment in OpenAI, the company behind ChatGPT, led to a $1.5 billion loss this quarter. Investors weren’t thrilled, and Microsoft’s stock dropped 5% after hours.
• 📱 Meta (Facebook’s parent company): Meta hit an all-time high after posting strong numbers. Revenue jumped 21%, and profits soared 49%. The company’s AI chatbot now has over 700 million monthly users and is expected to surpass 1 billion this year. CEO Mark Zuckerberg also hinted that 2025 will bring major shifts in how Meta works with governments.

What This Means for Investors

The Fed’s decision to hold rates steady suggests they’re waiting for clearer signs that inflation is under control before making any moves. Meanwhile, earnings reports from big tech companies show that AI remains a major focus for the future.

For investors, it’s a reminder to stay patient, watch how the market reacts in the coming days, and look for opportunities in growing industries like AI and automation.