📊 Market Overview
The S&P 500 and Nasdaq closed nearly unchanged yesterday, while the Dow slipped ▼0.6%. Markets digested a contentious Fed meeting where rates held steady but four dissenting votes signaled deep disagreement on the path forward. Today, all eyes turn to Apple’s earnings report and the March PCE inflation reading — the Fed’s favorite price gauge.
📊 Market Snapshot
The Fed held rates steady, but growing disagreement inside the committee means the next move — up or down — is far less certain than markets assumed.
📈 The Big Picture
Yesterday’s Fed meeting left interest rates at 3.5%–3.75%, but the real story was the friction. Four committee members voted against the decision, and Fed Chair Jerome Powell confirmed he’ll stay in his role despite speculation he might step down. That unusual level of internal disagreement tells us the Fed is genuinely torn between fighting sticky inflation and supporting a slowing economy — U.S. GDP (gross domestic product, the total value of goods and services produced) came in at just 2.0% for Q1, below expectations.
Meanwhile, the big tech earnings parade delivered mixed results. Alphabet (GOOGL) crushed expectations with cloud revenue up 63%. Amazon (AMZN) and Microsoft (MSFT) beat on earnings, though Amazon’s cloud growth of 28% fell short of the 30% investors hoped for. Meta Platforms (META) posted strong profits but raised its capital spending forecast by $10 billion, spooking some investors. If you hold a broad index fund, these companies heavily influence your returns — so today’s market reaction to their reports will set the tone.
📖 Term of the Day
PCE (Personal Consumption Expenditures) Index — a measure of how much prices are rising for everyday goods and services. The Fed considers it the most reliable inflation gauge.
Why you care today: The March core PCE came in at 3.2% year-over-year, matching forecasts. That’s still well above the Fed’s 2% target, which is exactly why the committee is so divided on what to do next with rates.
💼 Watchlist: 3 Stocks to Know Today
Alphabet (GOOGL) — “The Cloud King”
Alphabet reported earnings per share of $5.11, nearly double analyst estimates of $2.62–$2.73. Google Cloud revenue soared 63% year-over-year to $20 billion, and paid subscribers hit 350 million.
Meta Platforms (META) — “The Spending Spree”
JPMorgan downgraded Meta from Overweight to Neutral and cut its price target from $825 to $725. The reason: Meta raised its 2026 capital expenditure forecast to $125–$145 billion, which could push free cash flow deeply negative through 2027.
Eli Lilly (LLY) — “The Pharma Rocket”
Lilly posted revenue of $19.8 billion, up 56% year-over-year, powered by Mounjaro sales of $8.66 billion. The company also received FDA approval for Foundayo, a new once-daily GLP-1 obesity pill — no food or water restrictions required.
💬 Esther’s Take
