Morning in New York: Fed signals in focus

Daily review and forecast of events on the U.S. stock market from Mikhail Denislamov, Deputy Director of Freedom Capital Markets Research.

The key event of today will be the decisions of the first Fed meeting in 2026. The probability of keeping the rate in the range of 3.5-3.75% is estimated at 97% by CME FedWatch and is already fully taken into account in the quotations, so the attention of the investment community will be focused on the final press conference of the head of the regulator Jerome Powell. Any changes in the wording of the accompanying statement will be of great importance.

According to our forecast, Powell's tone will remain restrained. The main theme of his speech will be the Fed's independence, which is relevant due to the White House's attempts to put pressure on the monetary authorities' decisions. Thus, the day before, US President Donald Trump said that he would soon present his candidate for the post of the head of the Federal Reserve, promising that under the new leadership the rates will "significantly reduce". Market participants expect Powell to signal the future course of monetary policy given the latest macroeconomic data. Rate futures are still pricing in two rate cuts before the end of the year, but any hints that the regulator may take a more hawkish stance due to the stability of the economy could cause a spike in volatility.

Prior to the main session , GE Vernova (GEV), Amphenol (APH), AT&T (T), Starbucks (SBUX), Progressive (PGR ) and Danaher (DHR) will report quarterly results. After the market close , Tesla (TSLA), Microsoft (MSFT), Meta Platforms (META), Lam Research (LRCX), ServiceNow (NOW), IBM (IBM) and Celestica (CLS ) will release results.

Futures on US stock indices are showing positive dynamics. We assess the balance of risks for the upcoming trades as neutral with a positive opening. At the same time, we forecast volatility spikes after the announcement of the Fed meeting results. We focus on the S&P 500 fluctuations in the range of 6930-7050 points (from -0.7% to +1.0% of the previous session's closing level).

- F5 (FFIV) is up more than 10% after posting a strong quarterly report that beat expectations across all key metrics. The company reported revenue of $822 million (consensus: $758 million) and earnings of $4.45 per share (consensus: $3.65), helped by a 37% revenue growth in its key systems segment. Investors reacted positively to the company's second-quarter revenue guidance, which exceeded market expectations, as well as the revision of the revenue growth guidance from 0-4% to 5-6%.

- Shares of ASML Holding (ASML) are up more than 5% in the premarket following the release of its quarterly report. The company's revenue of €9.7 billion and profit of €2.84 billion were roughly in line with forecasts. At the same time, new orders reached €13.2bn, compared to the consensus of €6.32bn. The stock was further supported by optimistic forecasts for 2026 and the announcement of a €12bn buyback program.

- Texas Instruments (TXN) shares are up more than 7% before the start of major trading. The company's results were weaker than expected, but investors were encouraged by the company's guidance for the first quarter of 2026. Management expects revenue in the range of $4.32-4.68 billion and earnings of $1.22-1.48 per share (consensus: $4.42 billion and $1.28, respectively). The upper end of the forecasts, which exceeded expectations, was taken as a stabilization signal.

- Shares of Seagate Technology (STX) are up more than 10% after reporting revenue growth of 22% YoY to $2.83 billion and EPS of $3.11. Both figures beat Wall Street forecasts. The key growth driver was a 26% YoY increase in exabyte (EB) shipments to 190 EB, driven by demand from cloud data centers and AI applications.

- The securities of Venu Holding (VENU) are losing about 20% amid news of an additional offering of about $75 million.

- Qorvo (QRVO) is down about 9%. Its third-quarter results beat expectations, but a weak revenue guide ($775-825 million vs. consensus of $903.8 million) raises concerns about future growth.

January 27 trading on American stock exchanges ended mostly in the plus. S&P 500 updated the historical maximum, rising by 0.41%. Nasdaq 100 added 0.88%, Russell 2000 rose by 0.26%, and Dow Jones lost 0.83%.

Technology giant stocks provided positive momentum, leading to a divergence between the capitalization-weighted S&P 500 and its equilibrium counterpart (RSP: -0.16%).

Most of the Magnificent Seven stocks were trading in positive territory. The technology sector (XLK: +1.35%) was the leader of growth. The health care industry (XLV: -1.68%) was the outsider, with the sell-off driven by the news of lower Medicare rates.

The main macroeconomic event of the day was the publication of the Conference Board's Consumer Confidence Index for January. The index fell to its lowest level in 11 years, reaching 84.5 points, although the consensus suggested an increase from December's 89.1 points to 91. The details of the report showed a deterioration in assessments of the current situation (the index fell 9.9 points to 113.7) and future guidance (the index fell 9.5 points to 65.1). The labor market differential fell to its lowest level since March 2021. This statistic reinforced expectations of Fed monetary policy easing and contributed to the growth of rate-sensitive stocks.

The business activity index from FRB Richmond amounted to -6 points, although the expected value was -5. The dollar index DXY remains at its lowest levels in several years. At the same time, Trump said that he is not concerned about the weakening of the U.S. currency.

- General Motors (GM: +8.8% at the close on January 27) reported earnings per share (EPS) of $2.51 with a consensus of $2.24. Management provided a solid outlook for 2026, assuming a $12 figure. Investors were positive on the company's plans to increase buybacks by $6 billion and raise its dividend, despite a $7.6 billion write-down of assets related to electric vehicle production.

- The announcement of the groundbreaking of a new $24 billion memory chip manufacturing facility in Singapore supported Micron (MU: +5.4%). The launch of this fab, which is expected to create 1,600 new jobs, is aimed at meeting the strong demand for NAND memory microprocessors driven by the development of AI infrastructure. This was perceived by the market as a positive long-term signal.

- News of a partnership with Microsoft (MSFT: +2.2%) to develop AI agents in robotic systems caused Richtech Robotics (RR: +44.6%) stock price to soar. The partnership, which aims to integrate Azure AI technologies to enhance robot autonomy, is being hailed as a major strategic achievement.

- HCA Healthcare's (HCA: +7.1%) quarterly results were better than expected. The company's adjusted EBITDA increased by 11% YoY, and its own forecast for the current year in the range of $15.55-16.45 bln exceeded the consensus. The company also announced a dividend increase and a $10 bln buyback program. Even management's warning about the negative impact of healthcare reforms on the business did not hinder the stock growth.

- A weak revenue forecast for 2026, which implied a 2% YoY decline to $439 bln, and concerns over rising medical loss ratio (MCR) led to the collapse of UnitedHealth Group (UNH: -19.6%). Additional pressure on the managed care sector was exerted by news of a smaller than expected increase in Medicare Advantage payments for 2027.

- Weak loan book growth and revenue of $3.79 billion with a consensus of $3.84 billion led to a selloff in shares of Synchrony Financial (SYF: -5.8%). Meanwhile, the company's adjusted earnings per share came in at $2.04, in line with average expectations. In addition, the reporting reflected an increase in operating expenses, although the quality of the issuer's loan portfolio remained strong.

This article was AI-translated and verified by a human editor