By Tech Giants Stumble Amid AI Concerns
Tech stocks experienced sharp declines as mixed earnings from Microsoft, Tesla, and Meta Platforms tested investor confidence. Microsoft reported slower Azure growth, while Tesla missed estimates and outlined plans for cheaper EVs. Meta’s revenue beat expectations but raised concerns over future sales.
Federal Reserve Pauses Rate Cuts
The Fed held interest rates steady at 4.25%-4.50% during its first 2025 meeting, emphasizing that further reductions will depend on inflation and employment data. Persistent inflation and uncertainty around President Trump’s economic policies continue to cloud the path forward.
Tariff Tensions Heighten Market Risks
Trump’s proposed 25% tariffs on Canadian and Mexican imports sparked inflation concerns. Analysts warned these measures could complicate the Fed’s efforts to stabilize the economy and dampen prospects for rate cuts later this year.
Valuation Concerns Amid Rising Volatility
The S&P 500 remains historically expensive, trading at 22 times forward earnings. The recent AI-driven shakeup in tech stocks highlighted the importance of diversification within equities. Analysts noted a shift from optimism to caution among investors.