US stocks were mixed on Thursday after investors digested comments from Federal Reserve Chair Jerome Powell, ongoing inflation concerns, and the impact of President Trump's tariff policies. The Dow Jones Industrial Average (DJI) added about 0.1%, while the Nasdaq Composite (IXIC) dipped 0.2%, and the S&P 500 (GSPC) hovered slightly in negative territory. Major indices fluctuated throughout as markets sought direction following Wednesday's rally.
Market Movers:
- Tesla (TSLA) – Down 40% YTD: Short sellers have capitalized on Tesla’s steep decline, raking in over $10 billion in profits. Investors are still concerned about CEO Elon Musk’s shifting priorities, including his focus on government efficiency over Tesla’s core electric vehicle business. The stock has been a significant drag on the broader market, particularly within the "Magnificent Seven" tech group.
- CoreWeave IPO – Valued at Up to $26 Billion: AI cloud computing provider CoreWeave announced plans to go public, setting an IPO price range between $47 and $55 per share. If priced at the higher end, the company would achieve a $26 billion valuation, signaling continued investor interest in AI infrastructure despite recent volatility in tech stocks.
- Apple (AAPL) – Down 14% YTD: Apple’s stock has faced significant pressure, with short sellers making nearly $5 billion betting against the tech giant. Weaker-than-expected iPhone demand and regulatory concerns over its App Store policies have weighed on sentiment.
Economic Concerns and Fed Signals
The Federal Reserve’s decision to hold interest rates steady was largely anticipated, but Powell’s remarks reassured investors that the central bank remains committed to controlling inflation. Despite optimism, the Fed revised its projections, raising its inflation forecast while lowering its economic growth outlook. Powell noted that inflationary impacts from tariffs would likely be "transitory," though markets remain cautious about the broader implications of President Trump’s aggressive trade policies.
At the same time, mortgage rates remained elevated, with the average 30-year fixed rate at 6.67%. Homebuyers have seen little relief as borrowing costs remain near multi-year highs. Despite this, February's existing home sales rose by 4.2%, supported by increased inventory, but overall sales remain 1.2% lower than a year ago.
Triple Witching and Market Volatility
Investors are also bracing for Friday’s "triple witching," an event that occurs four times a year when options contracts tied to stocks, indexes, and ETFs simultaneously expire. This quarter’s expiration involves an estimated $4.5 trillion in contracts, potentially sparking significant market volatility. While some analysts believe the event may have a muted impact, history suggests that price swings could intensify as traders reposition their holdings.
Looking Ahead
As markets navigate a landscape of persistent inflation concerns, shifting Fed policies, and heightened geopolitical risks, investors will closely monitor upcoming economic data and corporate earnings. Friday’s triple witching event could further contribute to short-term market turbulence. Meanwhile, President Trump's tariff policies and their potential economic effects will remain a focal point for Wall Street, adding another layer of uncertainty as traders assess the broader macroeconomic landscape.