Closing Bell: Fed Stays the Course as Meta Soars on Earnings

Key Points

• Major indexes were little changed following a widely anticipated Fed decision, with the S&P 500 flat, the Nasdaq‑100 up 0.32%, and the Russell 2000 down 0.49%.
• Federal Reserve maintained its 3.5%–3.75% rate range, noting modest improvement in inflation but persistent labor‑market pressures.
• Meta reported strong quarterly performance with 24% revenue growth and a 9% increase in net income despite rising expenses.

Markets ended the day mixed, as today’s Fed meeting did not provide any commentary the market wasn’t already prepared for. The S&P 500 (SPX) finished flat, the Nasdaq‑100 (NDX) advanced 0.32%, and the Russell 2000 (RUT) declined 0.49%. Energy, Information Technology, and Materials led gains, while Real Estate and Consumer Staples lagged.

Fed Holds Interest Rates at Current Levels with Balanced Commentary

The Federal Reserve held the current interest rate range between 3.5% and 3.75%, as the market expected, noting mild improvements in inflation conditions and concerns about near‑term pressures in the labor market. Fed Chair Jerome Powell suggested that the committee is seeing weakness in hiring and job availability, though this is partially offset by productivity gains from A.I. The Fed also expects tariff‑driven food inflation to peak around the middle of the year.

Meta Rallies on Strong Earnings Beat

Meta reported strong Q4 results, with revenue rising 24% year-over-year and net income up 9%, despite a 40% increase in costs and expenses. Operating margin tightened to 41% from 48% a year earlier. Advertising revenue reached $58.1 billion, surpassing analyst expectations. Looking ahead, Meta projects Q1 2026 revenue between $53.5 billion and $56.5 billion, full‑year 2026 expenses in the range of $162–169 billion, and capital expenditures of $115–135 billion. Shares advanced over 5% in after-hours trading.

Market Events for Tomorrow

• 08:30 AM ET: Unemployment Claims
• 08:30 AM ET: Revised Nonfarm Productivity
• 08:30 AM ET: Trade Balance
• 10:00 AM ET: Factory Orders
• 10:00 AM ET: Final Wholesale Inventories
• 10:30 AM ET: Natural Gas Storage

Notable Earnings for Tomorrow

• A.M: AOS, MO, BX, BC, CAT, CMCSA, DOV, DOW, GPI, HON, LHX, LMT, MAN, MA, NDAQ, NSC, OSK, PH, PHM, RCI, RCL, SNY, SHW, LUV, SJM, STM, TMO, TSCO, TT, VLO, VIRT, XRX
• P.M: AAPL, AJG, BZH, DECK, EMN, HIG, KLAC, OLN, RHI, SNDK, SAP, SNDR, SYK, V, WDC, WY

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