Morning Bid: Mixed megacaps and Tehran tensions

• Meta stock rose 10% after announcing a 73% capital spending increase to $135 billion in 2026, while Microsoft fell on disappointing cloud computing results, highlighting divergent investor reactions to AI spending
• The Federal Reserve held rates unchanged with Chair Jerome Powell indicating no rate cuts until mid-year and sidestepping questions about his future and the Trump administration's criminal probe
• Oil prices climbed and gold approached $5,600 per ounce as Trump threatened military strikes against Iran if no nuclear deal is reached, with Tehran vowing to retaliate 'like never before'

Market Summary: Mixed Megacaps and Tehran Tensions

Market Overview:

The S&P 500 briefly surpassed 7,000 points on Wednesday and appears poised to do so again, despite mixed signals from earnings, currency movements, and geopolitical tensions.

Federal Reserve:

The Fed kept rates unchanged as expected. Chair Jerome Powell indicated that rate cuts likely won't occur until mid-year, citing a "solid economy" while remaining relaxed about labor market strains and above-target inflation. Powell sidestepped questions about Fed independence and a criminal probe launched by the Trump administration as his term ends in May.

Tech Earnings:

Megacap tech companies delivered divergent results:

• Meta: Shares surged 10% on a 24% revenue jump in Q4 and plans to increase capital spending 73% this year to $135 billion (an 87% increase in data center spending)
• Microsoft: Stock fell 6% due to disappointing cloud computing results
• Tesla: Rose 2% on autonomous driving prospects despite weakening EV sales
• Apple: Reports earnings Thursday

Geopolitical Tensions:

Oil prices climbed 2% Thursday on escalating U.S.-Iran tensions. President Trump threatened to "bomb Iran" if no nuclear deal is reached, with Tehran vowing to retaliate "like never before." Trump is reportedly considering targeted strikes against Iranian leaders to trigger regime change, though no final decision has been made.

Commodities:

Precious metals rallied strongly, with gold nearing $5,600/ounce and silver touching $120/ounce. Gold has risen over $1,000 in January alone.

Currency Markets:

The dollar continued its weekly decline despite Treasury Secretary Scott Bessent reaffirming the administration's "strong dollar policy."