|  | Nasdaq | 23,857.45 | |
|  | S&P | 6,978.03 | |
| | Dow | 49,015.60 | |
| | 10-Year | 4.251% | |
| | Bitcoin | $89,037.82 | |
| | Texas Instruments | $216.17 | |
| | Data is provided by |  |
*Stock data as of market close, cryptocurrency data as of 5:00pm ET. Here's what these numbers mean. | - Markets: Investors started the day with a burst of optimism, temporarily sending the S&P 500 above 7,000 for the first time ever. But by the end of the day, things had settled back at "meh," with stocks mostly flat after the Fed left interest rates unchanged as expected (more on that below).
- Stock spotlight: Texas Instruments, which made your graphing calculator but also makes chips, surged after delivering a rosy forecast. It's one of several tech companies reporting earnings this week, with Apple up today.
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ECONOMY If rate cuts were a game of freeze dance, then an emcee named Jerome just turned off the music. The Federal Reserve voted yesterday to keep interest rates at their current range of 3.5% to 3.75%, delivering a widely expected pause for the first time since July after three consecutive cuts at the end of 2025. The Fed's statement noted that "uncertainty about the economic outlook remains elevated." But the central bank's chair, Jerome Powell, told reporters "available indicators suggest that economic activity has been expanding at a solid pace," citing growth in consumer and business spending. The market broadly expected yesterday's pause: - Fears of a collapsing labor force—which would've supported the case for a cut—"no longer loom as large as they did last fall," JPMorgan Chase's chief US economist said in a recent client note.
- Inflation is also still well above the Fed's 2% benchmark.
"While the Fed has been politically pressured to cut rates, it is not pressed by the data," a chief economist at EY-Parthenon wrote ahead of yesterday's decision. About that political pressure… Despite nothing happening to interest rates as anticipated, all eyes were still firmly on Powell: - The Fed chair defended his attendance at the Supreme Court hearing last week on President Trump's attempted firing of Fed Gov. Lisa Cook, calling it "perhaps the most important legal case in the Fed's 113-year history." (Several Supreme Court justices "appeared wary" of the implications of upholding Cook's firing, per the New York Times.)
- Powell declined to comment on the federal investigation he currently faces, nor on his previous rebuke of the inquiry as a political maneuver to force rate cuts. Earlier in the day, CNBC reported that the Fed hadn't yet complied with the government's subpoenas.
Looking ahead…one or two rate cuts are expected later this year. Federal Reserve Gov. Christopher Waller—who joined Gov. Stephen Miran in dissenting in favor of a rate cut yesterday—is on Trump's short list to replace Powell when his term ends in May.—ML | | |
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WORLD  Tesla had its first annual revenue drop, plans to invest $2b in xAI. Slow sales are taking their toll on Tesla. Yesterday's earnings report showed the electric carmaker's fourth quarter profit was higher than analysts expected, but nonetheless down 61% compared to the same period the year before. And annual revenue declined to $94.8 billion, 3% less than the year before. But it's still got big plans. Tesla said it would invest $2 billion in Elon Musk's AI firm. It's also planning to stop making its Model S and Model X vehicles and convert their manufacturing space to build Optimus robots.
 Revenue—and AI spending—grow at Meta and Microsoft. Both tech giants dropped their earnings reports yesterday, and both reiterated their commitment to committing cash to building AI. Meta achieved record sales in the fourth quarter, blowing past Wall Street's expectations by taking in $59.9 billion, a 24% jump year over year. But Mark Zuckerberg appears all-in on his you've got to spend money to make money strategy, so its planned capital expenditures for 2026 of up to $135 billion trounced expectations, too. Investors are going along for the ride, sending Meta's stock up 6.6% in after-hours trading. Meanwhile, Microsoft's stock fell 6.1% after hours, after its own big spending reveal. The company's $81.3 billion in quarterly revenue beat expectations, though its cloud unit grew by 39%, which is slightly less than the quarter before. Its capital expenditures were $37.5 billion, up 66% from a year earlier.
 Trump warns Iran that its "time is running out" for a nuclear deal. Escalating tensions, the president said on Truth Social yesterday that "a massive armada" was headed toward Iran, and urged the country to make a deal to avert US military action. "Like with Venezuela, it is, ready, willing, and able to rapidly fulfill its mission, with speed and violence, if necessary," Trump wrote. Referencing the US-led operation that targeted Iran's nuclear sites in June, Trump continued: "The next attack will be far worse!" Iran's foreign minister responded that its military was ready "with their fingers on the trigger," according to the BBC.—AR
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WORK Amazon announced another round of layoffs yesterday, and this time the company is eliminating 16,000 corporate jobs. This is the second major layoff since October when the company cut 14,000 roles and warned there was more to come. The e-commerce giant is trying to reduce bureaucracy after a Covid-era hiring surge, while likely also freeing up funds for future AI spending. The 30,000 positions cut represent about 10% of Amazon's white collar workforce. The company said yesterday there could be more layoffs this year, but that the second round of terminations don't mark "a new rhythm" of cuts every few months. The announcement didn't include any mention of AI replacing workers, but the layoffs come as Amazon gears up to spend $125 billion this year on capital expenditures like data center buildouts. Last summer, CEO Andy Jassy told employees that AI adoption at the company would slowly start to reduce headcount. Big picture: On top of the job market seemingly grinding to a halt last year, employers announced 1.2 million layoffs in 2025, the highest since 2020, according to outplacement services firm Challenger, Gray and Christmas. Tech companies like Microsoft, Intel, and Meta announced layoffs last year as part of the Great Flattening to cut out middle management.—MM | | |
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TECH Is the threat of a malicious party gaining access to your computer worth the convenience of an audio recap of your calendar? That's the quandary you may face if you use Moltbot, an open-source AI assistant built on Anthropic's Claude that's drawing rave reviews despite potential security vulnerabilities. Originally dubbed Clawdbot when it launched in December before Anthropic pointed out that homophones don't get around copyright law, the lobster-inspired experimental software with the tagline "AI that actually does things" is blowing up on GitHub. The bot uses messaging apps like WhatsApp and Slack to communicate with users, but comes with some caveats: - A subscription to OpenAI or Anthropic is needed for optimal usage, and it can come with heavy connection costs.
- It runs on your computer or server (not on the cloud), leaving your system open to a "prompt injection" attack that can gain access to your personal data.
The solve: Work in a silo. Running Moltbot on a separate computer can keep scammers away, but it's an extra step that could be too much effort for someone who just needs AI-generated summaries. Cloudflare's gain: The cybersecurity company has no connection to Moltbot, but its stock is going for a ride all the same. It soared to 9.2% on Monday and 11% on Tuesday when users suggested getting Cloudflare Tunnel to patch holes—but then it crashed 10.2% yesterday.—DL | | |
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STAT Get ready to raise a celebratory Peppermint Mocha Frappuccino, because Starbucks is so back. The coffee chain's earnings report released yesterday shows that its turnaround efforts are starting to pay off: - Same-store sales were up globally and in the US by 4%, the first increase in the country since 2023.
- Store traffic grew by 3%—which may have been partially propelled by everyone trying to get their hands on those adorable viral holiday bear mugs. Customers also spent more time and money at Starbucks.
- And Starbucks expects the trend to continue, with global and US same-store sales growing by at least 3% this year.
"We're pleased with our progress, and we believe we remain ahead of schedule, and we're confident on our path forward," Brian Niccol, the company's CEO, said. "But we also recognize that we're still in our turnaround." He's right that it's not all blue skies for the purveyor of Pink Drinks…while revenues rose 5% to $9.9 billion, profit plunged by more than 60%, dragged down by investments in its stores and workforce, high wholesale coffee prices, and tariffs.—AR |
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NEWS - The two Border Patrol agents who fired guns in the fatal shooting of Alex Pretti were put on administrative leave, a step that the government described as "standard protocol." Newly published video footage appears to show Pretti confronting federal immigration officers 11 days before he was killed.
- The FBI searched the election office of Fulton County, GA, looking for records related to the 2020 election, which President Trump falsely claimed was "rigged" against him while speaking at Davos, Switzerland, last week, saying "people will soon be prosecuted for what they did."
- Home Depot laid off 800 people and said corporate staff must come into the office five days a week.
- The man accused of spraying a strong-smelling liquid on Rep. Ilhan Omar, who has frequently clashed with President Trump, at a Minneapolis town hall on Tuesday has a criminal record and has made social media posts critical of Democrats and supporting Trump, according to the Associated Press.
- For those on shutdown watch: Senate Democrats released demands for changes to ICE operations in order for them to support a bill to keep the government fully funded after Saturday.
- Caravana's stock fell after a short-seller accused it of overstating earnings.
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PLAY Brew Mini: Your sample clue for today is, "Golfers prefer them to tees." Play the Mini here. Three Headlines and a Lie Three of these headlines are real and one is faker than whatever temperature your wall thermostat is claiming it is. Can you spot the odd one out? - Why you'll never find a hair salon inside of a Costco
- Alleged mail thief arrested after bragging about crimes on Instagram stories
- Hollywood Chamber of Commerce says Sydney Sweeney did not get permission to hang bras on Hollywood sign
- Yorgos Lanthimos's next absurdist project? A Super Bowl ad for Grubhub
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ANSWER We made up the one about Costco hair salons. Word of the Day Today's Word of the Day is: forage, meaning "to wander in search of food." Thanks to Michelle from Memphis for the intrepid suggestion. Submit another Word of the Day here. |
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