Powell Power: Will it save the Market? 19/03/2025

HOT stories for today

 

US market wrap:
 

• Stocks retreated Tuesday as the recent Wall Street sell-off reignited, halting a brief two-day rebound. The Dow slid 0.62%, the S&P 500 dropped 1.07%, and the Nasdaq tumbled 1.71%. Tesla, one of the biggest casualties of the market’s correction, extended its losing streak, sinking over 5% after RBC Capital Markets slashed its price target. Meanwhile, Nvidia’s GTC event failed to spark excitement, as investors hoping for a game-changing revenue stream instead got an energetic but predictable keynote with no major surprises.
• On a more positive note, Trump and Putin agreed on steps toward a peace deal in Ukraine, securing a narrow ceasefire set to take effect immediately. With that development in motion, market focus now shifts to Jerome Powell and the Federal Reserve, as investors await key policy signals.

Powell Power: Will it save the Market?
 

• As the Federal Reserve meets this week, investors are anxiously awaiting signals on the future of interest rates. While no rate cut is expected, Fed Chair Jerome Powell is likely to emphasize a patient approach, reinforcing that the central bank is in no rush to adjust policy. However, uncertainty looms over whether the Fed will stick to its previous forecast of two rate cuts this year or scale back expectations amid inflation risks and trade uncertainty.
• Markets remain on edge, with Trump’s tariff policies adding further complications. Some economists warn that persistent trade disputes could fuel inflation, making the Fed more reluctant to ease. Meanwhile, Wall Street is pricing in multiple rate cuts in 2025, setting up a potential disconnect between investor expectations and the Fed’s message. With stocks near correction territory, Powell’s words at his press conference will be pivotal. A measured tone could reassure investors, but any signs of hesitation on rate cuts might rattle markets further. Whether “Powell Power” is enough to stabilize sentiment—or if the Fed’s cautious stance fuels more uncertainty—remains to be seen.

 
Stocks on the move: 
      

• Palantir (PLTR) fell 4% after Jefferies reaffirmed its underperform rating, citing concerns over elevated valuation in the defense technology sector.
• Nvidia (NVDA) declined 3.3% as investors took a cautious stance ahead of CEO Jensen Huang’s keynote speech at the company’s GTC AI Conference.
• Lucid (LCID) surged 8.8% following an upgrade from Morgan Stanley to equal weight from underweight. Analysts highlighted a growing bull case tied to artificial intelligence as a potential catalyst for the EV maker.
• Hims & Hers Health (HIMS) plunged 9.2% after the U.S. Food and Drug Administration (FDA) raised concerns about unapproved GLP-1 drugs used for weight loss, including compounded versions of semaglutide, which the company began prescribing last year.
• Alphabet (GOOGL) slid 2.7% after Google announced a $32 billion acquisition of cloud security startup Wiz in an all-cash deal, marking one of the largest purchases in the company’s history.
   

Today’s action

• Asia-Pacific stocks traded mixed on Wednesday, tracking Wall Street’s tech-driven losses from the previous session. Investors focused on Japan, where the Bank of Japan (BOJ) kept interest rates steady at 0.5%, aligning with expectations as policymakers assessed the potential impact of Trump’s tariff policies. Japan’s Nikkei 225 remained flat, while the Topix index edged up 0.59%.
• Meanwhile, U.S. stock futures inched higher ahead of the highly anticipated Federal Reserve rate decision. Dow futures rose 50 points (+0.12%), while S&P 500 and Nasdaq 100 futures gained 0.16% and 0.25%, respectively. Tuesday’s sharp market pullback—snapping a brief rebound—has investors on edge. With the Fed set to announce its policy decision at 2 p.m. ET, traders are bracing for a potential market-moving event.

Watchlist: NVDA, SMCI, TSLA, PLTR, LCID, GIS, GOOGL, WSM
 

Bitcoin

• Bitcoin retreated 3.5% to $81,300 on Tuesday, mirroring declines in U.S. equities as markets turned cautious ahead of the Federal Reserve's policy announcement. The Nasdaq and S&P 500 both shed over 1% in late trading, reflecting investor jitters.
• The Federal Open Market Committee commenced its two-day meeting, with outcomes and Chair Jerome Powell's briefing scheduled for Wednesday afternoon. While interest rates are anticipated to remain unchanged, market participants are keenly awaiting any indications of future monetary policy shifts
  Watchlist: Bitcoin: 78 000-100 000, Ethereum:1900-2600, Solana: 100-176
   

Forex

• The Japanese Yen (JPY) extended losses on Wednesday after Bank of Japan (BoJ) Governor Kazuo Ueda highlighted ongoing economic uncertainties in his post-meeting remarks. Softer-than-expected domestic data further weighed on the currency, while a modest rebound in the U.S. Dollar (USD) pushed USD/JPY to the 150.00 level, marking a two-week high.
• Meanwhile, EUR/USD edged lower to 1.0935 in Asian trading as the USD showed signs of recovery. Traders remain cautious ahead of the Federal Reserve’s rate decision, with the central bank expected to hold rates steady while updating its economic projections. In Europe, the German parliament approved a major spending surge, but it failed to provide immediate support to the Euro as markets await Fed-driven volatility.
  Watchlist: EUR/USD: 1.0700-1.0950, USD/JPY: 148-150
   

Basic Materials

• WTI crude oil extended losses for a second straight session, trading around $66.50 per barrel in early Asian trading Wednesday. The decline comes as U.S. President Donald Trump and Russian President Vladimir Putin agreed to halt strikes on energy infrastructure amid the Ukraine war, raising expectations of increased Russian oil supply. However, tensions persist, with Putin rejecting a broader ceasefire proposal, keeping geopolitical uncertainty in focus. Additionally, API data showed U.S. crude inventories rose by 4.593 million barrels, further pressuring prices.
• Meanwhile, gold (XAU/USD) surged to a new record high of $3,045, supported by geopolitical risks and growing bets on Fed rate cuts. However, a modest U.S. Dollar rebound is limiting further gains as traders await the Federal Reserve’s policy decision. While the Fed is widely expected to hold rates steady at 4.25%-4.50%, investors will be closely watching Chair Jerome Powell’s remarks and updated economic projections, which could dictate gold’s next move.
  Watchlist: GOLD 2600-3050, US Oil: 65.00-79.00
   

Key Economic Events Today:

EST time

10:30 am: USD Crude Oil Inventories
02:00 pm: USD Federal Funds Rate
02:30 pm: USD FOMC Press Conference

Earnings

BMO (Before the US Market opens)
GIS          General Mills
WSM       Williams-Sonoma Inc
GDS        GDS Holdings Ltd.
AMC (After the US Market closes): FIVE, WS, YY

The TEFS Analyst team wishes you a successful day!