The U.S. economy continued to grow in the final quarter of 2024, but at a slower-than-expected pace as a decline in investments <a href="https://www.benzinga.com/news/econ-s">offset strong consumer spending.</a>



Gross domestic product grew at an annualized rate of 2.3% in the fourth quarter compared to the previous three months, according to preliminary official data released Thursday. 



This outcome marks a deceleration from the 3.1% growth recorded earlier, missing economist forecasts of a 2.6% expansion, as tracked by TradingEconomics.



The backbone of growth remained strong real consumer spending, which increased at an annualized pace of 4.3% in the fourth quarter, accelerating from the previous quarter's 3.7% gain. This marks the strongest consumer spending expansion since the first quarter of 2023.



&#8220;The increase in real GDP in the fourth quarter primarily reflected increases in consumer spending and government spending that were partly offset by a decrease in investment,&#8221; the Bureau of Economic Analysis wrote in its report.



Personal Consumption Expenditures prices also picked up, rising from 1.5% to an annualized 2.3% in the fourth quarter. Excluding food and energy, core PCE prices increased at an annualized rate of 2.5%, up from the previous 2.2%, but in line with estimates.



Meanwhile, the Department of Labor reported on Thursday that weekly jobless claims fell to 207,000 for the week ending Jan. 25, below the previous week&#8217;s 223,000 and expectations of 220,000.



Continuing claims for the week ending Jan. 18 eased to 1.858 million, down from the previous 1.9 million and below forecasts of 1.89 million. 



<h3 class="wp-block-heading">Market Reactions</h3>



Futures on major U.S. indices were mixed, with contracts on the S&amp;P 500 rising 0.3% by 8:35 a.m. ET, while Nasdaq 100 futures were down 0.4%. 



Major tech companies witnessed mixed performances following earnings reports. Shares of Microsoft Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NYSE">MSFT</a>) were down 4.5% in the premarket, while Meta Platforms Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>) and Tesla Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>) rose 1.9% and 4%, respectively. 



On Wednesday, the S&amp;P 500 index, replicated by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>), closed 0.5% lower in reaction to the Fed meeting and <a href="https://www.benzinga.com/economics/macro-economic-events/25/01/43318325/a-different-powell-emerges-fed-chair-softens-hawkish-tone-on-interest-rates-bitcoin" target="_blank" rel="noopener">Chair Jerome Powell&#8216;s remarks.</a><a href="https://www.benzinga.com/economics/macro-economic-events/25/01/43318325/a-different-powell-emerges-fed-chair-softens-hawkish-tone-on-interest-rates-bitcoin"> </a>



Treasury yields held steady,&nbsp;with the 10-year yield hovering at 4.50% and the two-year yield at 4.20%.&nbsp;The iShares 20+ Year Treasury Bond ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TLT#NYSE">TLT</a>) was up 0.6%&nbsp;during the premarket.&nbsp;



The U.S. dollar index (DXY), tracked by the Invesco DB USD Index Bullish Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UUP#NYSE">UUP</a>), remained flat.



Read Next: 



<ul>
<li><a href="https://www.benzinga.com/25/01/43330328/us-stocks-set-for-gains-ahead-of-q1-gdp-apple-earnings">US Stocks Set For Gains Ahead Of Q1 GDP, Apple Earnings: Expert Says &#8216;Higher January&#8217; Bodes Well For The Rest Of The Year</a></li>
</ul>



Photo: janews/Shutterstock.com

Large Cap

Macro Economic Events

Broad U.S. Equity ETFs

Currency ETFs

Econ #s

Economics

Federal Reserve

Tech

ETFs

MSFT

TSLA

US Economic Growth Falls Short Of Q4 Estimates, Consumer Spending Hits 7-Quarter High

United Parcel Service Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UPS#NYSE">UPS</a>) shares are trading lower after the company reported <a target="_blank" href="https://www.benzinga.com/pressreleases/25/01/b43330139/ups-releases-4q-2024-earnings-and-provides-2025-guidance" rel="noreferrer noopener">mixed fourth-quarter results</a>.



UPS reported consolidated revenue growth of 1.5% year-over-year to $25.301 billion, missing the consensus of $25.419 billion. Adjusted EPS was $2.75, up 11.3% YoY, <a href="https://www.benzinga.com/earnings">above the consensus of $2.53.</a>



GAAP results include a $639 million charge ($0.74 per share), covering a $506 million pension charge, $73 million in transformation costs, $46 million in asset impairments, and $14 million for pension withdrawal.



Consolidated operating profit reached $2.9 billion, increasing 18.1% from the last year quarter and 11.2% on a non-GAAP adjusted basis. Adjusted operating margin stood at 12.3%, up from 11.2% a year ago.



U.S. Domestic Segment revenue increased 2.2% to $17.312 billion, reflecting a 2.4% increase in revenue per piece and increases in air cargo. The adjusted operating margin stood at 10.1%.



International Segment revenue grew 6.9% to $4.923 billion, reflecting an 8.8% increase in average daily volume. The adjusted operating margin was 21.6%.



Supply Chain Solutions Segment revenue declined by 9.1% to $3.066 billion, driven by the Coyote divestiture, partially offset by growth in air and ocean forwarding. The adjusted operating margin was 9.3%.



UPS&#8217; operating cash flow for fiscal 2024 totaled $10.1 billion, and free cash flow was $6.3 billion. The company returned $5.9 billion to shareholders through dividends and share buybacks.



&#8220;We are making business and operational changes that, along with the foundational changes we&#8217;ve already made, will put us further down the path to becoming a more profitable, agile and differentiated UPS that is growing in the best parts of the market,&#8221; commented Carol Tomé, UPS chief executive officer.



Strategic Actions: The company announced reaching an agreement to reduce volume with its largest customer by over 50% by late 2026, insourcing 100% of UPS SurePost from January 1, 2025, and reconfiguring its U.S. network. Additionally, UPS is launching multi-year &#8220;Efficiency Reimagined&#8221; initiatives, aiming to save $1 billion through an end-to-end process redesign.



2025 Outlook: UPS expects revenue of ~ $89 billion, <a target="_blank" href="https://www.benzinga.com/calendars/guidance" rel="noreferrer noopener">sharply below the $94.877 billion consensus</a>, and sees an adjusted operating margin of 10.8%.



The company plans $3.5 billion in capital spending, $5.5 billion in dividends (pending approval), $1 billion in share buybacks, and an expected 23.5% tax rate.



Price Action: UPS shares are trading lower by 13.5% at $115.66 premarket at the last check Thursday.



Photo via Shutterstock.

Earnings

Equities

News

Guidance

Movers

UPS Q4 Earnings: Major Customer Volume Cut Raises Jitters, Stock Tanks

International Business Machines Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IBM#NYSE">IBM</a>) saw its shares surge over 8% in premarket trading Thursday following the release of its fourth-quarter earnings, which surpassed analysts&#8217; expectations. The tech giant also unveiled its ambitious <a href="https://www.benzinga.com/25/01/43327741/ibm-bets-big-on-ai-based-hybrid-cloud-sees-2-billion-in-generative-ai-deals-from-inception-to-date-in-q4">artificial intelligence strategy</a>, further boosting investor confidence.



What Happened: IBM <a href="https://www.benzinga.com/25/01/43321676/ibm-reports-q4">reported earnings</a> per share of $3.92, exceeding the anticipated $3.75. Revenue also edged past forecasts, reaching $17.55 billion compared to the projected $17.54 billion. This represents a slight increase from the $17.38 billion reported during the same period last year.



The fourth-quarter results painted a mixed <a href="https://www.benzinga.com/25/01/43321676/ibm-reports-q4">picture</a> across IBM&#8217;s various segments. The software segment demonstrated robust growth, with revenue up 10%. However, the Consulting segment experienced a 2% decline, while Infrastructure proved to be the weakest performer, with revenue down 8%.



See Also: <a href="https://www.benzinga.com/25/01/43327741/ibm-bets-big-on-ai-based-hybrid-cloud-sees-2-billion-in-generative-ai-deals-from-inception-to-date-in-q4">IBM Beats Q4 Estimates, Bets Big On AI With $2 Billion Generative AI Business</a>



A key highlight of the earnings report was IBM&#8217;s unveiling of its comprehensive AI strategy. The company has integrated AI across its entire portfolio, from tools designed to help clients manage hybrid cloud environments and infrastructure, to consulting services and platform products.



&#8220;Our book of business related to generative AI now stands at greater than $2 billion inception-to-date. The mix is roughly one-quarter software and three-quarters consulting signings,&#8221; CEO and Chairman Arvind Krishna stated during the earnings call.



See Also: <a href="https://www.benzinga.com/25/01/43329174/western-digitals-businesses-position-itself-to-be-a-key-supplier-the-ai-driven-demand-for-storage-solutions-ahead-of-the-split">Western Digital Reports Mixed Q2 Ahead Of Business Split: AI Demand Bolsters Outlook</a>



Why It Matters: Looking ahead, Krishna expressed optimism about the company&#8217;s prospects. &#8220;With our focused strategy, enhanced portfolio, and culture of innovation, we're well-positioned for 2025 and beyond and expect revenue growth of at least five percent and free cash flow of about $13.5 billion this year,&#8221; he said.



Price Action: The positive earnings report and AI strategy announcement sent IBM shares soaring 8.03% to $247 per share in premarket trading, significantly outperforming the 0.40% gain in the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>).



Despite the positive market reaction, analysts remain somewhat cautious. According to 22 analysts <a href="https://www.benzinga.com/quote/IBM/analyst-ratings">tracked by Benzinga</a>, IBM has a consensus price target of $200.19 per share with a ‘hold' rating. Individual price targets range from a high of $260 to a low of $139. The average price target of $233.33 from Morgan Stanley, RBC Capital, and JPMorgan suggests a potential downside of 5.53%.



<figure class="wp-block-image size-large"><a href="https://www.benzinga.com/quote/IBM/analyst-ratings"><img loading="lazy" decoding="async" width="1024" height="385" src="https://editorial-assets.benzinga.com/wp-content/uploads/2025/01/30054559/IBM-ANR-1-1024x385.png" alt="" class="wp-image-757716" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2025/01/30054559/IBM-ANR-1-1024x385.png 1024w,https://editorial-assets.benzinga.com/wp-content/uploads/2025/01/30054559/IBM-ANR-1-300x113.png 300w,https://editorial-assets.benzinga.com/wp-content/uploads/2025/01/30054559/IBM-ANR-1-768x288.png 768w,https://editorial-assets.benzinga.com/wp-content/uploads/2025/01/30054559/IBM-ANR-1.png 1057w" sizes="(max-width: 1024px) 100vw, 1024px" /></a></figure>



Read Next:



<ul>
<li><a href="https://www.benzinga.com/general/market-summary/25/01/43328377/t-mobile-underscores-spacexs-starlinks-role-in-california-wildfire-relief-closes-record-breaking-growth-year">T-Mobile Underscores SpaceX&#8217;s Starlink&#8217;s Role In California Wildfire Relief, Closes Record-Breaking Growth Year</a></li>
</ul>



Photo courtesy: Shutterstock

Earnings Beats

WIIM

IBM Stock Soars 8% In Premarket After Beating Q4 Estimates, Unveiling AI Strategy

U.S. stock futures rose on Thursday, rebounding from a decline triggered by the Federal Reserve&#8217;s decision to hold interest rates steady. All four benchmark indices were trading higher. 



Apple Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), the world&#8217;s largest company by market capitalization, will report its first-quarter earnings after the market closes today.



Investors are also awaiting the first-quarter GDP data, which will be released before the market opens.



The 10-year Treasury yield is currently at 4.50%, and the two-year yield is at 4.20%. The CME Group&#8217;s FedWatch <a href="https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html">tool</a> indicates an 80% probability that the Federal Open Market Committee will maintain current interest rates in March 2025.



<figure class="wp-block-table is-style-stripes"><table style="overflow:auto; height: 90px; display: block;"><tbody><tr><td>Futures</td><td>Change (+/-)</td></tr><tr><td>Nasdaq 100</td><td>0.47%</td></tr><tr><td>S&amp;P 500</td><td>0.35%</td></tr><tr><td>Dow Jones</td><td>0.42%</td></tr><tr><td>Russell 2000</td><td>0.99%</td></tr></tbody></table></figure>



In premarket trading on Thursday, both the SPDR S&amp;P 500 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) and the Invesco QQQ Trust ETF (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) were higher. SPY was up 0.33% at $603.80, and QQQ gained 0.44% to reach $523.10, based on <a href="https://pro.benzinga.com/dashboard">Benzinga Pro</a> data.



Cues From The Last Session



U.S. stocks <a href="https://www.benzinga.com/news/earnings/25/01/43328594/nasdaq-declines-as-nvidia-edges-lower-fed-leaves-interest-rates-unchanged-fear-greed-index-in-neutral-zone">fell</a> on Wednesday after the Federal Reserve held interest rates steady.



Nvidia Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) shares dropped over 4% on the news of potential sales restrictions for China. General Dynamics Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GD#NYSE">GD</a>) and Corning Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLW#NYSE">GLW</a>) beat earnings expectations, with the latter offering strong guidance.



The U.S. trade deficit widened to a record $122.11 billion in December, while wholesale inventories fell 0.5%. Tech, real estate, and healthcare sectors dragged the S&amp;P 500 lower, though consumer staples and communication services gained.



<figure class="wp-block-table is-style-stripes"><table style="overflow:auto; height: 90px; display: block;"><tbody><tr><td>Index</td><td>Performance (+/-)</td><td>Value</td></tr><tr><td>Nasdaq Composite</td><td>-0.51%</td><td>19,632.32</td></tr><tr><td>S&amp;P 500</td><td>-0.47%</td><td>6,039.31</td></tr><tr><td>Dow Jones</td><td>-0.31%</td><td>44,713.52</td></tr><tr><td>Russell 2000</td><td>-0.25%</td><td>2,283.10</td></tr></tbody></table></figure>



Insights From Analysts



Following the revival from the DeepSeek-led slump, Scott Wren, the senior global market strategist at Wells Fargo Advisors said, &#8220;As we try to look multiple years into the future, we believe development expenditures aimed at artificial intelligence will increase dramatically.&#8221;



However, he also said that sector-led investing could be volatile. &#8220;Sector investing can be more volatile than investments that are broadly diversified over numerous sectors of the economy and will increase a portfolio's vulnerability to any single economic, political, or regulatory development affecting the sector. This can result in greater price volatility.&#8221;



Ryan Detrick, the chief market strategist at Carson Research, drew parallels between the S&amp;P 500 performance based on the Chinese calendar year in his latest note.



According to the Chinese calendar, 2025 is the &#8216;Year of Snake&#8217;.



Mapping the data from 1950, Detrick found that &#8220;The Year of the Snake has been up only three out of six times and up an average of less than 1%.&#8221;



Additionally, stocks have alternated between higher and lower since 1953, suggesting this could be a down year. Next year is the Year of the Horse, which hasn't been &#8220;all that strong either.&#8221;



&#8220;Lastly, we found it amusing that animals with horns saw some of the best returns, with last year's horned Dragon a good one for the bulls,&#8221; he added, however, he also said that Carson Research would never suggest investing based on the zodiac signs.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">Welcome to Year of the Snake. More like Year of the Bear. <a href="https://t.co/c23eQDyYUW">https://t.co/c23eQDyYUW</a>&mdash; Ryan Detrick, CMT (@RyanDetrick) <a href="https://twitter.com/RyanDetrick/status/1884616468446294279?ref_src=twsrc%5Etfw">January 29, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Furthermore, as the S&amp;P 500 is up 2.91% year-to-date, he highlighted that &#8220;higher January tends to suggest better returns the final 11 months of the year.&#8221;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">The S&amp;P 500 is up nearly 3% YTD and January is almost over. This is a good sign, as a higher January tends to suggest better returns the final 11 months of the year. Up 12.2% on avg and up 86.7% of the time when Jan is higher, compared with all yrs avg return of 8.1% and 75%. <a href="https://t.co/He6PpOTnLc">pic.twitter.com/He6PpOTnLc</a>&mdash; Ryan Detrick, CMT (@RyanDetrick) <a href="https://twitter.com/RyanDetrick/status/1884625505862791475?ref_src=twsrc%5Etfw">January 29, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Upcoming Economic Data



Here&#8217;s what investors will keep an eye on Thursday:



<ul>
<li>On Thursday, the GDP data for the first quarter and the initial jobless claims data till Jan. 25, will be released at 8:30 a.m. ET.</li>
</ul>



<ul>
<li>December's pending home sales will be out at 10:00 a.m., ET.</li>
</ul>



Stocks In Focus:



<ul>
<li>Apple Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>) was down 0.14% in the premarket on Thursday ahead of its earnings, which will be released after the closing bell. Analysts expect it to report quarterly earnings of $2.35 per share on revenue of $124.13 billion</li>
</ul>



<ul>
<li>United Parcel Service Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UPS#NYSE">UPS</a>) was up 1.62% as Wall Street expects it to report earnings of $2.53 per share on revenue of $25.42 billion, before the opening bell.</li>
</ul>



<ul>
<li>Tesla Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>) was up 1.78% despite weaker-than-expected fourth-quarter earnings and sales results. It promised to launch new and &#8220;more affordable&#8221; models in the first half of 2025 and showcased the example of the company&#8217;s full self-driving in a video shared online.</li>
</ul>



<ul>
<li>Meta Platforms Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>) was up 2.23% after reporting better-than-expected fourth-quarter sales results. However, its sales guidance for the current quarter fell short of expectations.</li>
</ul>



<ul>
<li>Microsoft Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>) was down 3.99% as its cloud revenue missed estimates despite beating overall revenue and EPS estimates.</li>
</ul>



<ul>
<li>IBM Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IBM#NYSE">IBM</a>) was up 7.60% as it beat its revenue and earnings estimates for the fourth quarter.</li>
</ul>



<ul>
<li>Other companies that are slated to report earnings before the opening bell today include Mastercard Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MA#NYSE">MA</a>) up 0.93%, Blackstone Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BX#NYSE">BX</a>) up 1.24%, Caterpillar Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CAT#NYSE">CAT</a>) up 0.70%, and Visa Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/V#NYSE">V</a>) which report after closing bell was up 0.91%.</li>
</ul>



Commodities, Gold And Global Equity Markets:



Crude oil futures were trading lower in the early New York session by 0.67% to hover around $72.13 per barrel.



The gold spot index was up by 0.64% to $2,777.47 per ounce. The Dollar Index was down 0.01% at 107.989 level.



Asian markets were higher on Thursday as Australia's ASX 200, Japan's Nikkei 225, South Korea's Kospi, and Hong Kong's Hang Seng rose. European markets were also higher in trade.



Read Next:



<ul>
<li><a href="https://www.benzinga.com/general/market-summary/25/01/43328377/t-mobile-underscores-spacexs-starlinks-role-in-california-wildfire-relief-closes-record-breaking-growth-year">T-Mobile Underscores SpaceX&#8217;s Starlink&#8217;s Role In California Wildfire Relief, Closes Record-Breaking Growth Year</a></li>
</ul>



Photo courtesy: Shutterstock

Market Summary

Futures

Pre-Market Outlook

Markets

Analyst Ratings

Trading Ideas

AAPL

NVDA

US Stocks Set For Gains Ahead Of Q1 GDP, Apple Earnings: Expert Says 'Higher January' Bodes Well For The Rest Of The Year

Tesla Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>) CEO Elon Musk on Wednesday said that the company intends to make several thousand units of its Optimus humanoid robot this year for deployment in its own factory which will inform the next version of the robot slated for launch next year and likely to be sold to rival companies. 



What Happened: Musk said on Wednesday that the company will make a few thousand Optimus robots this year which will do chores at the Tesla factory by the end of the year which employees do not like to do. These robots will inform the production of the next version of the robot which will be launched mid-next year and be likely sold to other companies, the CEO said, while adding that there is a lack of certainty on the exact timing.



&#8220;I think long-term Optimus has the potential to be north of $10 trillion in revenue. Like, it&#8217;s real bananas,&#8221; Musk said. Musk himself said that his revenue predictions sound &#8220;absolutely insane&#8221; but expressed optimism that they will prove to be accurate. &#8220;My prediction long term is that Optimus will be overwhelmingly the value of the company.&#8221;



Talking about the price of the humanoid robot, Musk said that the robot&#8217;s production cost will be below $20,000 once production touches a million units a year. However, the price of Optimus will be set by market demand, Musk said, while also stating that he expects demand will not be a problem even at a high price. 



Why It Matters: In November, Musk said that Optimus is already doing some tasks at the Tesla factory and its ability is increasing rapidly, 



&#8220;The toughest part by far is improving the design of Optimus for ease of manufacturing and tooling up a complex supply chain, so it can be made in significant numbers,&#8221; Musk then said. 



During Tesla's annual shareholder meeting in June, Musk said that there will be at least&nbsp;<a href="https://www.benzinga.com/news/24/06/39246781/elon-musk-thinks-humanoid-robots-will-one-day-exceed-human-population-from-nvidias-project-gr00t-to" target="_blank" rel="noreferrer noopener">one humanoid robot</a>&nbsp;for every person in the world in the future, implying a total humanoid robot population of at least 10 billion or more, of which the EV company will have a significant share.



&#8220;While autonomous vehicle is a $5-$7 trillion market cap situation,&nbsp;<a href="https://www.benzinga.com/news/24/06/39327644/tesla-ceo-elon-musk-eyes-25-trillion-market-cap-with-optimus-bot-admits-to-being-pathologically-opti" target="_blank" rel="noreferrer noopener">Optimus is a $25 trillion market cap situation</a>,&#8221; Musk then said.



In October, the company showcased its Optimus bots at&nbsp;<a href="https://www.benzinga.com/news/24/10/41284847/tesla-reveals-two-seater-cybercab-that-drives-itself" target="_blank" rel="noreferrer noopener">its robotaxi unveiling event</a>&nbsp;in Los Angeles. About 20 active robots walked through the crowd assembled at the event. Optimus poured drinks, handed out snacks, and performed dance moves. However, the robots were&nbsp;<a href="https://www.benzinga.com/news/24/10/41354482/tesla-engineer-admits-optimus-robots-were-human-assisted-to-some-extent-at-robotaxi-unveiling-event" target="_blank" rel="noreferrer noopener">human-assisted to &#8220;some extent"</a>&nbsp;to showcase the company's vision at the event, &nbsp;Head of Engineering For Optimus&nbsp;Milan Kovac&nbsp;said in a post on X.



Tesla reported fourth-quarter earnings and revenue <a href="https://www.benzinga.com/news/earnings/25/01/43321103/tesla-q4-earnings-highlights-revenue-miss-eps-miss-ev-updates-automaker-says-2025-will-be-a-seminal-year">below estimates </a>after market close on Wednesday. However, the company also assured the start of production of new and more affordable models in the first half of 2025, spurring stock growth after hours.



Photo courtesy: Shutterstock



Check out more of Benzinga&#8217;s Future Of Mobility coverage by&nbsp;<a href="https://www.benzinga.com/topic/mobility" target="_blank" rel="noreferrer noopener">following this link.</a>



Read Next:



<ul>
<li><a href="https://www.benzinga.com/tech/25/01/43259304/trumps-proposed-corporate-tax-cuts-could-boost-teslas-fy25-eps-by-4-says-analyst">Trump&#8217;s Proposed Corporate Tax Cuts Could Boost Tesla&#8217;s FY25 EPS by 4%, Says Analyst</a></li>
</ul>

Tesla Likely To Sell Optimus To Rivals In 2026, Elon Musk Says Revenue Potential Of Bot North Of $10 Trillion: 'It's Real Bananas'

Leading cryptocurrencies lifted on Wednesday, defying the stock market's decline as the Federal Reserve snapped its interest rate-cutting streak.



<figure class="wp-block-table"><table style="overflow:auto; height: 90px; display: block;"><tbody><tr><td>Cryptocurrency</td><td>Gains +/-</td><td>Price (Recorded at 8:15 p.m. ET)</td></tr><tr><td>Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>)</td><td>+2.61%</td><td>$104,300.32</td></tr><tr><td>Ethereum (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/eth/usd">ETH</a>) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td><td>+1.31%</td><td>$3,146.53</td></tr><tr><td>Dogecoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/doge/usd">DOGE</a>)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</td><td>+1.83%</td><td>$0.3304</td></tr></tbody></table></figure>



What Happened: Bitcoin reclaimed the $104,000 mark, helped by bullish commentary from Fed Chair Jerome Powell.



Ethereum also registered gains, although it waited for a strong upward breach from $3,200.



The second-largest cryptocurrency has trailed Bitcoin thus far in 2025, recording year-to-date losses of 5.80% as opposed to the apex cryptocurrency's 11% gains.



At the press conference, Powell took a positive stance on cryptocurrencies, <a href="https://www.benzinga.com/economics/macro-economic-events/25/01/43318325/a-different-powell-emerges-fed-chair-softens-hawkish-tone-on-interest-rates-bitcoin">praising the ongoing efforts</a> to provide a clear regulatory framework for the industry.



The rally resulted in $257.59 million in cryptocurrency liquidations in the last 24 hours, with the majority being downside bets.



Bitcoin's Open Interest rose by 2.58% in the last 24 hours, indicating an influx of fresh money into its futures market.



However, over 50% of Bitcoin traders took short positions on the asset, according to the Long/Short ratio, suggesting that the market could reverse.



The "Greed" sentiment softened from 72 to 76, according to the reading on the Crypto Fear &amp; Greed Index.



Top Gainers (24-Hours)



<figure class="wp-block-table"><table style="overflow:auto; height: 90px; display: block;"><tbody><tr><td>Cryptocurrency</td><td>Gains +/-</td><td>Price (Recorded at 8:15 p.m. ET)</td></tr><tr><td>Onyxcoin (XCN)</td><td>+26.14%</td><td>$0.03458</td></tr><tr><td>Fartcoin (FARTCOIN)</td><td>+20.64%</td><td>$0.9892</td></tr><tr><td>Jito (JTO)</td><td>+12.81%</td><td>$3.30</td></tr></tbody></table></figure>



The global cryptocurrency market capitalization stood at $3.52 trillion, growing by 1.99% in the last 24 hours.



Stocks edged lower on Wednesday. The Dow Jones Industrial Average lost 136.83 points, or 0.31%, to close at 44,713.52. The S&amp;P 500 slid 0.47%, ending at 6,039.31, while the tech-heavy Nasdaq Composite dipped 0.51% to close at 19,632.32.



The slide <a href="https://www.benzinga.com/25/01/43316048/fed-holds-interest-rates-steady-halts-streak-of-consecutive-cuts-as-inflation-remains-elevated">came after the Fed kept interest rates unchanged</a>, pausing its monetary easing cycle that began in September.



See More: <a href="https://www.benzinga.com/money/best-crypto-scanners">Best Cryptocurrency Scanners</a>



Analyst Notes: Blockchain analytics firm Santiment weighed in on the cryptocurrency market's rebound and its divergence from stocks.



"They [cryptocurrencies and stocks] have been tightly correlated for much of the past 3 years now, but today is a good sign that cryptocurrencies aren&#8217;t entirely fluctuating as simply &#8216;high leveraged tech stocks&#8217;, as many skeptics have been claiming," the research firm said.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true">&#x1f4c8; Cryptocurrency has not (yet) been phased by Jerome Powell and the Fed&#39;s decision to halt interest rate cuts for the time being. Interest rates have been a sensitive topic for investors and traders of all sectors, particularly after they were aggressively cut in 2020 (as a… <a href="https://t.co/p49FjhLiKI">pic.twitter.com/p49FjhLiKI</a>&mdash; Santiment (@santimentfeed) <a href="https://twitter.com/santimentfeed/status/1884735462813614175?ref_src=twsrc%5Etfw">January 29, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Influential cryptocurrency analyst and trader Ali Martinez sounded the alarm about the prospect of a major Ethereum downside.



"Ethereum MVRV has dropped below the 160-day MA once again. The last time this happened was on June 23, 2024, which led to a 40% price correction from $3,500 to $2,100," the analyst remarked.



MVRV, which stands for Market Value to Realized Value, is a ratio used to assess the value of a cryptocurrency by comparing its current market value to its realized value.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="500" data-dnt="true"><a href="https://twitter.com/hashtag/Ethereum?src=hash&amp;ref_src=twsrc%5Etfw">#Ethereum</a> <a href="https://twitter.com/search?q=%24ETH&amp;src=ctag&amp;ref_src=twsrc%5Etfw">$ETH</a> MVRV has dropped below the 160-day MA once again. The last time this happened was on June 23, 2024, which led to a 40% price correction from $3,500 to $2,100. <a href="https://t.co/zbnqPqzr0D">pic.twitter.com/zbnqPqzr0D</a>&mdash; Ali (@ali_charts) <a href="https://twitter.com/ali_charts/status/1884730743017918771?ref_src=twsrc%5Etfw">January 29, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Photo by Avi Rozen on Shutterstock



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Cryptocurrency

$BTC

$DOGE

$ETH

Bitcoin, Ethereum, Dogecoin Rise, Defy Stocks Decline As Fed Leaves Rates Unchanged: Top Trader Sees Possible 40% Downside For This Large-Cap Crypto

President Donald Trump criticized the Federal Reserve&#8217;s handling of inflation and banking regulation on Wednesday, following the central bank&#8217;s decision to hold interest rates <a href="https://www.benzinga.com/25/01/43316048/fed-holds-interest-rates-steady-halts-streak-of-consecutive-cuts-as-inflation-remains-elevated">steady at 4.25%-4.5%</a>.



What Happened: In a Truth Social post, Trump pledged to combat inflation through expanded energy production and regulatory cuts if elected, while denouncing the Fed&#8217;s focus on climate initiatives and diversity programs. 



His comments came just hours after the Federal Open Market Committee maintained rates and ended its streak of three consecutive cuts that began in September.



&#8220;The Fed has done a terrible job on Bank Regulation,&#8221; Trump wrote, promising that his administration would &#8220;unleash lending for all American people and businesses&#8221; through Treasury-led regulatory reforms.



<figure class="wp-block-image aligncenter size-large is-resized"><img decoding="async" src="https://editorial-assets.benzinga.com/wp-content/uploads/2025/01/29200623/Screenshot-2025-01-30-at-6.35.30%E2%80%AFAM-1024x773.png" alt="" class="wp-image-757028" style="width:472px;height:auto"/></figure>



The Fed&#8217;s latest policy statement noted that while inflation has moved <a href="https://www.benzinga.com/25/01/43316048/fed-holds-interest-rates-steady-halts-streak-of-consecutive-cuts-as-inflation-remains-elevated">closer to its 2% target</a>, it &#8220;remains somewhat elevated.&#8221; This marks a slight shift from December&#8217;s more optimistic tone about inflation progress, according to multiple economists.



See Also: <a href="https://www.benzinga.com/news/earnings/25/01/43321103/tesla-q4-earnings-highlights-revenue-miss-eps-miss-ev-updates-automaker-says-2025-will-be-a-seminal-year">Tesla Q4 Earnings Highlights: Revenue Miss, EPS Miss, EV Updates, Automaker Says &#8216;2025 Will Be A Seminal Year&#8217;</a>



Why It Matters: Bill Adams, chief economist for Comerica Bank, suggested the Fed&#8217;s cautious stance might reflect concerns about potential inflationary pressures from proposed <a href="https://www.benzinga.com/25/01/43319060/first-rate-cut-in-june-if-at-all-in-2025-economist-says-as-federal-reserve-holds-rates-steady">Trump administration policies</a>, including higher tariffs and stricter immigration controls.



Markets showed mixed reactions to the Fed&#8217;s announcement. The SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) traded near flat, while the U.S. dollar index strengthened modestly. Treasury yields edged higher, with the policy-sensitive two-year yield rising 3 basis points to 4.24%.



Fed Chair Jerome Powell <a href="https://www.benzinga.com/economics/macro-economic-events/25/01/43318325/a-different-powell-emerges-fed-chair-softens-hawkish-tone-on-interest-rates-bitcoin">sidestepped questions about Trump&#8217;s criticism</a> during his press conference, stating &#8220;It&#8217;s not appropriate for me to comment on what the president said.&#8221; Powell emphasized that the Fed isn&#8217;t rushing to adjust rates, noting that recent inflation readings have shown encouraging progress.



Market expectations for <a href="https://www.benzinga.com/25/01/43319060/first-rate-cut-in-june-if-at-all-in-2025-economist-says-as-federal-reserve-holds-rates-steady">future rate cuts have shifted</a>, with investors now pricing in a 30% probability of a March cut, rising to 45% for June. Joseph Brusuelas, RSM&#8216;s chief economist, projects two quarter-point cuts this year, likely in June and December, though he emphasized these moves would depend heavily on incoming economic data.



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Image Via Shutterstock 



Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

Trump Slams Fed's 'Terrible Job' On Bank Regulation After Rate Hold, Vows To 'Unleash Lending For All American People'

The CNN Money Fear and Greed index showed a decline in the overall market sentiment, while the index remained in the &#8220;Neutral&#8221; zone on Wednesday.



U.S. stocks settled lower on Wednesday after the Federal Reserve left interest rates unchanged at its recent policy meeting.



NVIDIA Corporation (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) shares fell over 4% on Wednesday amid reports indicating Trump officials have discussed further curbing China sales.



General Dynamics Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GD#NYSE">GD</a>) reported better-than-expected fourth-quarter fiscal 2024 results. Corning Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLW#NYSE">GLW</a>) posted better-than-expected fourth-quarter financial results and also issued first-quarter core EPS guidance with a midpoint above estimates.



On the economic data front, the U.S. trade deficit in goods increased to a record $122.11 billion in December versus a revised $103.5 billion gap in the prior month. U.S. wholesale inventories declined by 0.5% month-over-month to $898 billion in December following a revised 0.1% fall in the previous month and versus market estimates of a 0.2% gain.



Most sectors on the S&amp;P 500 closed on a negative note, with information technology, real estate, and healthcare stocks recording losses on Wednesday. However, consumer staples and communication services stocks bucked the overall market trend, closing the session higher.



The Dow Jones closed lower by around 137 points to 44,713.52 on Wednesday. The S&amp;P 500 fell 0.47% to 6,039.31, while the Nasdaq Composite fell 0.51% at 19,632.32 during Wednesday's session.



Investors are awaiting earnings results from Apple Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AAPL#NASDAQ">AAPL</a>), United Parcel Service Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UPS#NYSE">UPS</a>), and Caterpillar Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CAT#NYSE">CAT</a>) today.



What is CNN Business Fear &amp; Greed Index?



At a current reading of 45.6, the index remained in the &#8220;Neutral&#8221; zone on Wednesday, versus a prior reading of 47.3.



The Fear &amp; Greed Index is a measure of the current market sentiment. It is based on the premise that higher fear exerts pressure on stock prices, while higher greed has the opposite effect. The index is calculated based on seven equal-weighted indicators. The index ranges from 0 to 100, where 0 represents maximum fear and 100 signals maximum greediness.



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Photo courtesy: Shutterstock

Nasdaq Declines As Nvidia Edges Lower, Fed Leaves Interest Rates Unchanged: Fear & Greed Index In 'Neutral' Zone

Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) may have found a new friend in town, as Fed Chair Jerome Powell took a surprisingly open stance on crypto assets during his <a href="https://www.benzinga.com/economics/macro-economic-events/25/01/43318325/a-different-powell-emerges-fed-chair-softens-hawkish-tone-on-interest-rates-bitcoin">Wednesday press conference.</a>



Powell indicated that banks can serve crypto customers as long as they understand and manage the risks, marking a notable shift from his <a href="https://www.benzinga.com/markets/cryptocurrency/24/12/42571007/bitcoin-etfs-rise-in-pre-market-despite-jerome-powell-says-fed-cannot-hold-btc-whats-going-on">previously anti-crypto approach</a>.



&#8220;We&#8217;re not against innovation, and we certainly don&#8217;t want to take actions that would cause banks to terminate customers.&#8221;



Moreover, he praised Congress for its ongoing efforts to establish a clearer regulatory framework for cryptocurrencies, emphasizing that stronger oversight would be beneficial for the industry and financial stability.



The largest cryptocurrency rallied 3% for the session to over $104,000 levels, on track to snap four straight days of losses. 



<h3 class="wp-block-heading">Stock Market Sentiment Remains Weak</h3>



Wall Street, however, remained underwater, weighed down by persistent concerns over the AI trade.



Shares of Nvidia Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) dropped nearly 6%. The dip follows reports indicating that President Donald Trump is pushing for stricter restrictions on U.S. chip exports to China.



The S&amp;P 500 index — tracked by the SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) — closed 0.45% down for the day, broadly unchanged from levels it had before the Fed meeting. The Nasdaq 100 — followed by the Invesco QQQ Trust (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) — finished 0.2% lower. The Dow fell 0.3%.



The Fed Chair provided a more balanced stance on interest rates, signaling patience while keeping options open for future adjustments.



&#8220;We are not in a hurry to cut,&#8221; Powell said, while also softening his tone during the presser. He noted that policy remains &#8220;meaningfully restrictive&#8221; and that recent inflation data has shown &#8220;more positive progress.&#8221;



Powell perhaps recognized that hawkish remarks, like those championed in December, would have inflicted unnecessary damage on an already volatile market.



Sector-wise, there were few standout performers. The Communication Services Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLC#NYSE">XLC</a>) closed 0.4% higher, outperforming the others but remaining broadly flat following Powell&#8217;s remarks.



The Real Estate Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLRE#NYSE">XLRE</a>) was the session laggard, down 1.2%. 



In currency markets, the U.S. dollar index remained steady at 108 levels, marginally up by 0.1% for the day. 



Powell's remarks pushed Treasury prices lower, sending yields on the rate-sensitive 2-year note back to 4.21%, roughly where they stood before the Fed's statement.



Expectations for a March rate cut dwindled. Fed futures are now pricing in an 18% chance, down from 30% before the meeting. However, for the full year, markets still see a nearly 90% probability that the Fed will cut rates twice.



Betting market odds, tracked by Kalshi, remained largely unchanged. The most likely scenario points to two rate cuts in 2025.



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Treasuries

XLRE

Bitcoin Flies Above $104,000 After Powell Remarks, Stocks Remain Stunned By AI Concerns

Electric vehicle leader Tesla Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>) reported fourth-quarter financial results after the <a href="https://www.benzinga.com/earnings">market close Wednesday.</a>



Here are the key highlights.



What Happened: Tesla reported fourth-quarter revenue of $25.71 billion, up 2% year-over-year. The revenue total missed a Street consensus estimate of $27.26 billion, according to data<a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent012925&amp;t=be2bearmibe3na1"> from Benzinga Pro.</a>



The company reported fourth-quarter earnings pre share of 73 cents, which missed a Street consensus estimate of 76 cents.



Automotive revenue totaled $19.8 billion in the fourth quarter, down 8% year-over-year.



Tesla said its revenue was impacted by growth in energy and services, growth in vehicle deliveries and higher regulatory credit revenue. Reduced selling prices had a negative impact, the company said. 



The company had 11.0 GWh of energy storage deployed in the fourth quarter.



Tesla <a href="https://www.benzinga.com/trading-ideas/movers/25/01/42766117/tesla-stock-tumbles-on-q4-deliveries-whats-going-on" target="_blank" rel="noreferrer noopener">previously announced </a>its fourth-quarter vehicle production and delivery figures. The company produced 459,445 vehicles and delivered 495,570 vehicles in the quarter. While the deliveries set a record in the fourth quarter, the company&#8217;s 1.79 million vehicles delivered in 2024 were down from 1.81 million in 2023. This was the first annual deliveries decline in company history.



Tesla highlighted the fourth quarter as a record one for vehicle deliveries and energy storage deployments.



"We expect Model Y to once again be the best-selling vehicle, of any kind, globally for the full year 2024, and we have made it even better, with the New Model Y now launched in all markets," the automaker said.



Tesla highlighted affordability being "top of mind for customers." The company said its cost of goods sold per vehicle hit its lowest level ever at less than $35,000 in the fourth quarter.



For the full fiscal year, Tesla's automotive revenue was $77.1 billion, down 6% year-over-year. Full-year total revenue was $97.7 billion, up 1% year-over-year.



Tesla ended the quarter with $1.07 billion in digital assets, which includes the company's Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) holdings. The company previously disclosed $184 million in digital assets in recent quarters.



The company said it recognized a mark-to-market gain of $600 million on digital assets in the fourth quarter.



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What's Next: Tesla said its AI training compute increased by 400% year-over-year in 2024. The company said it&#8217;s planning to begin FSD launches later this year in parts of the United States.



For an update on vehicles, the company's earning report lists the Cybercab as being in development, the Tesla Semi in pilot production and the Roadster in development.



"2025 will be a seminal year in Tesla's history as FSD (Supervised) continues to rapidly improve with the aim of ultimately exceeding human levels of safety," the company said.



Tesla said it expects its vehicle business to return to growth in 2025.



"The rate of growth will depend on a variety of factors, including the rate of acceleration of our autonomy efforts, production ramp at our factories and the broader macroeconomic environment."



The company said it has sufficient liquidity to fund its product roadmap.



"Product plans for new vehicles, including more affordable models, remain on track for start of production in the first half of 2025."



Tesla said the new vehicles will be produced on the same manufacturing lines as existing vehicles, which will lead to less cost reduction than previously expected.



The Cybercab robotaxi will pursue an "unboxed" manufacturing strategy and is set for volume production beginning in 2026.



TSLA Price Action: Tesla stock is trading 3.5% higher in the after-hours session at $402.70. Its 52-week trading range is $138.80 to $488.54. Shares lost 2.3% to $389.10 in Wednesday&#8217;s regular session. 



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<iframe loading="lazy" title="&#x1f534; WATCH LIVE: Tesla Q4 2024 Earnings Call &#x7C; $TSLA" width="500" height="281" src="https://www.youtube.com/embed/G2UrBRGrLb0?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>
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Tesla Cybercab photo courtesy of the company.

Tesla Q4 Earnings Highlights: Revenue Miss, EPS Miss, EV Updates,  Automaker Says '2025 Will Be A Seminal Year'

Microsoft Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NASDAQ">MSFT</a>) reported its second-quarter financial results after Wednesday's closing bell. Here's a look at the key figures<a href="https://www.benzinga.com/25/01/43287988/microsoft-q2-preview"> from the quarter. </a>



The Details: Microsoft reported quarterly GAAP earnings of $3.23 per share, beating the $3.11 consensus estimate. Quarterly revenue clocked in at $69.6 billion, beating the $68.78 billion analyst consensus estimate.



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<ul>
<li>Revenue in Microsoft&#8217;s Intelligent Cloud segment was $25.5 billion and increased 19%. Within Intelligent Cloud, server products and cloud services revenue increased 21% driven by Azure and other cloud services revenue growth of 31%. </li>



<li>Revenue in the Productivity and Business Processes segment was $29.4 billion, an increase of 14%. </li>



<li>Revenue in More Personal Computing was relatively unchanged at $14.7 billion. </li>



<li>Microsoft&#8217;s capital expenditures were $22.6 billion in the second quarter. </li>
</ul>



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"We are innovating across our tech stack and helping customers unlock the full ROI of AI to capture the massive opportunity ahead,&#8221; said Satya Nadella, CEO of Microsoft. "Already, our AI business has surpassed an annual revenue run rate of $13 billion, up 175% year-over-year."



"This quarter Microsoft Cloud revenue was $40.9 billion, up 21% year-over-year," said Amy Hood, executive vice president and CFO of Microsoft. "We remain committed to balancing operational discipline with continued investments in our cloud and AI infrastructure."



Microsoft will host a conference call to discuss the results and provide forward-looking guidance at 5:30 p.m. ET. 



MSFT Price Action: According to data from <a href="https://pro.benzinga.com/?gspk=YWRhbWVja2VydDUzMzY&amp;gsxid=zBMR4PKmcgBw">Benzinga Pro</a>, Microsoft shares are down 1.43% after-hours at $436.32 on Wednesday.  



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After-Hours Center

Microsoft Shares Slide After Q2 Results, Cloud Revenue Misses Expectations: Details

It wasn't the same Fed Chair Jerome Powell who shook markets in December with a hawkish stance that unsettled investors. The version that appeared at the Fed's January press conference was far more measured, cautious, and seemingly at ease <a href="https://www.benzinga.com/25/01/43316048/fed-holds-interest-rates-steady-halts-streak-of-consecutive-cuts-as-inflation-remains-elevated">with the path ahead.</a>



Powell sidestepped the brewing clash over interest-rate policy sparked by President Donald Trump, opting to let time and economic data shape the Fed's path ahead.



Notably, he didn't rule out Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) being adopted by commercial banks, marking a sharp U-turn from his previously allergic stance on crypto-related matters.



While the Federal Reserve&#8217;s decision to hold rates at 4.25%-4.50% was widely expected, Powell delivered remarks that helped stabilize investor sentiment in a volatile week shaken by the DeepSeek news. 



Here&#8217;s what happened at the January&#8217;s press conference.



<h3 class="wp-block-heading">Not In A Hurry To Ease, But Let&#8217;s See How Things Evolve&#8230;</h3>



Powell signaled patience but not outright resistance to future cuts.



"If the economy remains strong and inflation does not continue to move sustainably toward 2%, we can maintain policy restraint for longer," he said, while also indicating that weaker labor market conditions or faster-than-expected disinflation could warrant easing.



Notably, he indicated that recent inflation data has been encouraging.



"We don't overreact to two good readings or two bad readings, but nonetheless, the last couple of readings have suggested more positive progress," Powell said. &#8220;The expectation is that we will make continued progress.&#8221;



Powell described monetary policy again as &#8220;meaningfully restrictive,&#8221; a shift from December when he suggested rates were nearing neutral and a new phase of policy had begun.



When asked if a March rate cut was still on the table, Powell kept his response ambiguous: "We don't need to be in a hurry to adjust our policy stance."



Also Read: <a href="https://www.benzinga.com/trading-ideas/movers/25/01/43317129/nvidia-faces-export-risks-as-us-officials-weigh-tougher-ai-chip-limits-for-china">Nvidia Faces Export Risks As US Officials Weigh Tougher AI Chip Limits For China</a>



<h3 class="wp-block-heading">Powell Avoided Political Landmines, Downplays DeepSeek Macro Risk</h3>



When asked about President Donald Trump's demand for immediate rate cuts, Powell refused to engage. "I've had no contact," he said, adding, "It's not appropriate for me to comment on what the president said." 



Tesla Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>) and SpaceX CEO Elon Musk also took aim at the Fed, calling it "absurdly overstaffed." 



Powell dismissed the criticism, saying, "We run a very careful budget process. We&#8217;re fully aware that we owe that to the public, and we believe we do that." 



When pressed on Trump's pledge to fight inflation by lowering energy costs, Powell again sidestepped. "I&#8217;m not going to react or discuss anything that any elected politician might say," he said.



When questioned on whether the recent AI-related stock volatility triggered by DeepSeek signaled any concerns about financial conditions, Powell downplayed its macroeconomic significance. 



"What really matters for us is macro developments and substantial changes in financial conditions that are persistent for a period of time. So I wouldn't put that label on these events, although of course, we're all watching it with interest."



<h3 class="wp-block-heading">Bitcoin No Longer Off The Table? Powell's Evolving View On Crypto</h3>



One of the more surprising moments of the press conference came when Powell addressed Bitcoin and the broader cryptocurrency market. In stark contrast to his historically crypto-skeptical stance, Powell didn't dismiss the idea of banks integrating digital assets.



"Banks are perfectly able to serve crypto customers as long as they understand and can manage the risks," Powell said, marking a significant shift from his previous concerns over financial stability. 



He indicated that the regulatory threshold for banks engaging in crypto activities has been higher due to the nascent nature of the industry, but he stopped short of opposing its role in the financial system.



Powell also voiced support for greater regulatory clarity. &#8220;I do think it would be helpful if there were a greater regulatory apparatus around crypto, and I think that&#8217;s something Congress was working on quite a lot.&#8221;



<h3 class="wp-block-heading">Final Takeaway: Powell Adapts, But Stays Cautious</h3>



Powell appeared to have learned a key lesson: hawkish surprises can wreak havoc on markets. 



His shift in tone from December was evident—less hawkish, more cautious, but still noncommittal on rate cuts. 



At the same time, Powell stood firm on the Fed's independence, dodging political pressure from both Trump and Musk.



Beyond monetary policy, Powell's measured stance on Bitcoin signaled a departure from his previous skepticism. While he didn't offer an outright endorsement, his willingness to acknowledge crypto's role in the financial system was a notable shift.



Read Next: 



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<li><a href="https://www.benzinga.com/trading-ideas/movers/25/01/43317129/nvidia-faces-export-risks-as-us-officials-weigh-tougher-ai-chip-limits-for-china">Nvidia Faces Export Risks As US Officials Weigh Tougher AI Chip Limits For China</a></li>
</ul>



Image created using artificial intelligence via Midjourney.

A Different Powell Emerges: Fed Chair Softens Hawkish Tone On Interest Rates, Bitcoin

NVIDIA Corporation (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) shares are moving lower on Wednesday amid reports indicating that Donald Trump administration officials are discussing further restricting NVIDIA&#8217;s <a href="https://www.benzinga.com/news/management/25/01/43274796/jensen-huang-loses-20b-in-wealth-how-deepseek-hit-nvidia-stock-and-worlds-richest-people">sales to China</a>.



What To Know: According to <a href="https://www.bloomberg.com/news/articles/2025-01-29/trump-officials-discuss-tightening-curbs-on-nvidia-china-sales?embedded-checkout=true">Bloomberg</a>, citing sources familiar with the matter, officials are exploring additional restrictions on NVIDIA&#8217;s sales to China, with a particular focus on limiting the sale of H20 chips.



NVIDIA&#8217;s H20 chips are reduced semiconductors designed to comply with restrictions imposed by the U.S. government on chip exports to China. These chips are capable of hosting artificial intelligence software while adhering to these export limitations.



According to the report, it's unlikely a decision on chip restrictions will be made soon, as the Trump administration continues to complete its staffing. During his confirmation hearing, Commerce Secretary nominee Howard Lutnick appeared supportive of chip controls.



NVIDIA said it, "is ready to work with the administration as it pursues its own approach to AI." Furthermore, the company has argued that the restrictions will undermine U.S. companies and further China&#8217;s drive for technological independence, which goes against the objectives of the trade actions.



If the Trump administration moves forward with additional chip restrictions, it could impact NVIDIA&#8217;s revenue, as China is the largest market for semiconductors.



Earlier this week, NVIDIA and other companies in the semiconductor industry and beyond saw declines due to <a href="https://www.benzinga.com/content/43275286/is-deepseek-challenging-nvidias-ai-dominance">heightened competition</a> from China in the AI sector. Chinese startup DeepSeek launched its own AI model, reportedly on par with OpenAI&#8217;s ChatGPT.



NVDA Price Action: At the time of writing, Nvidia stock is trading 4.9% lower at $121.63 at the time of publication Wednesday, according to data from <a href="https://www.benzinga.com/pro/">Benzinga Pro</a>.



Read Next:



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<li> <a href="https://www.benzinga.com/25/01/43256648/cathie-wood-swoops-in-to-buy-amd-shares-amid-deepseek-tech-upheaval-dumps-tesla-stock-worth-8-1-million">Cathie Wood Swoops In To Buy AMD Shares Amid DeepSeek Tech Upheaval, Dumps Tesla Stock Worth $8.1 Million</a></li>
</ul>



Image: Shutterstock

Asia

Nvidia Faces Export Risks As US Officials Weigh Tougher AI Chip Limits For China

Intel Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/INTC#NASDAQ">INTC</a>) will be reporting its fourth-quarter earnings on Thursday. Wall Street expects 12 cents in EPS and $13.81 billion in revenues as the company reports<a href="https://www.benzinga.com/calendars/earnings?tickers=INTC" target="_blank" rel="noreferrer noopener"> after market hours</a>.



The stock is down 54.51% over the past year, 1.36% YTD. Investors are closely watching updates on PC demand, AI pipeline, and the ongoing CEO search. The chipmaker has struggled with weak AI positioning and declining data center market share, raising concerns over its long-term growth.



Let&#8217;s look at what the charts indicate for Intel stock and how the stock currently maps against Wall Street estimates.



Read Also: <a href="https://www.benzinga.com/25/01/43285369/asml-lam-research-and-kla-lead-semicap-growth-as-ai-and-tech-upgrades-drive-105-billion-market-outlook">DeepSeek Sell-off Offers Opportunities On Semicaps, Analyst Bumps Up Price Forecasts For KLA, Nova And Camtek</a>



<h1 class="wp-block-heading">Strong Bearish Pressure Ahead Of Q4 Earnings</h1>



Intel stock is struggling under strong bearish pressure, with its share price of $19.98 trading below its five-, 20- and 50-day exponential moving averages. This signals continued selling pressure and the risk of further downside.



<figure class="wp-block-image size-full"><a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent012925&amp;t=be2bearmibe3na1"><img loading="lazy" decoding="async" width="630" height="491" src="https://editorial-assets.benzinga.com/wp-content/uploads/2025/01/29072149/Screenshot-2025-01-29-at-5.47.06-PM.png" alt="" class="wp-image-755591" srcset="https://editorial-assets.benzinga.com/wp-content/uploads/2025/01/29072149/Screenshot-2025-01-29-at-5.47.06-PM.png 630w,https://editorial-assets.benzinga.com/wp-content/uploads/2025/01/29072149/Screenshot-2025-01-29-at-5.47.06-PM-300x234.png 300w" sizes="(max-width: 630px) 100vw, 630px" /></a></figure>



<a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent012925&amp;t=be2bearmibe3na1" target="_blank" rel="noreferrer noopener">Chart created using Benzinga Pro</a>



The eight-day and 20-day simple moving averages confirm short-term weakness, suggesting that Intel stock has yet to find a solid support level. The 50-day simple moving average at $21.31 reinforces this bearish outlook, making any near-term rallies suspect. 



Meanwhile, the 200-day simple moving average at $25.56 highlights the stock's prolonged downtrend, signaling a challenging road to recovery. 



The Moving Average Convergence Divergence (MACD) at a negative 0.12 points to ongoing negative momentum, while a Relative Strength Index (RSI) of 44.67 suggests the stock is approaching, but not yet in, oversold territory. 



Investors should brace for continued volatility and look for signs of stabilization before considering a potential bullish reversal.



<h1 class="wp-block-heading">Intel Analysts See 12% Upside</h1>



Ratings &amp; Consensus Estimates:<a href="https://www.benzinga.com/quote/INTC/analyst-ratings" target="_blank" rel="noreferrer noopener"> The consensus analyst rating</a> on Intel stock stands at Neutral currently with a price target of $28.54. The latest analyst ratings from UBS, Citigroup and Barclays imply a 12.14% upside for Intel stock, with a $22.33 average price target.



INTC Price Action: Intel stock was trading down 1.25% at $19.80 at the time of publication Wednesday.



Read Next: 



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<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/25/01/43304027/deepseek-selloff-is-a-correction-not-start-of-sustained-bear-market-goldman-sachs">DeepSeek Selloff Is A Correction, Not Start Of &#8216;Sustained Bear Market&#8217;: Goldman Sachs</a></li>
</ul>



Photo: Shutterstock

Technicals

Previews

INTC

Intel Faces Bearish Pressure As Q4 Earnings Loom: CEO Search, Ai In Focus

The Trump administration's Tuesday memo, titled "A Fork in the Road,&#8221; is being viewed as a move to push career federal workers out of their jobs and, observers say, replace them with loyalists, <a href="https://www.axios.com/2025/01/28/trump-federal-workers-quit-severance">noted</a> Axios, which first reported this story.



The memo, sent by email, told federal employees they have until Feb. 6 to choose whether to participate in a &#8220;deferred resignation program&#8221; that would allow them to decide now that they will resign in September.



"Between the flurry of anti-worker executive orders and policies, it is clear that the Trump administration's goal is to turn the federal government into a toxic environment where workers cannot stay even if they want to," said Everett Kelley, president of the American Federation of Government Employees in a statement <a href="https://apnews.com/article/trump-buyouts-to-all-federal-employees-f67f5751a0fd5ad8471806a5a1067b5e">reported</a> by the Associated Press.



&#8220;If you resign under this program, you will retain all pay and benefits regardless of your daily workload and will be exempted from all applicable in-person work requirements until Sept. 30, 2025 (or earlier if you choose to accelerate your resignation for any reason),&#8221; the email stated. An IRS employee in Kansas City told Benzinga she received her email at around 7 p.m. ET Tuesday evening.



The federal government employed more than three million people as of November 2024, which accounted for nearly 2% of the nation's entire civilian workforce, <a href="https://www.pewresearch.org/short-reads/2025/01/07/what-the-data-says-about-federal-workers/">according</a> to the Pew Research Center. Not counting the Postal Service, there are more than 2.4 million federal workers, which makes the federal government the nation's single largest employer, with even more workers than Walmart, Amazon or McDonald's.



"Even a fraction of the workforce accepting buyouts could send shockwaves through the economy and trigger widespread disruptions throughout society as a whole, triggering wide-ranging — and as yet unknowable — implications for the delivery, timeliness and effectiveness of federal services across the nation," notes the Pew report.



While President Donald Trump vowed to disrupt Washington with the help of the <a href="https://www.benzinga.com/news/24/12/42608814/elon-musks-doge-role-in-government-set-for-fascinating-tough-fight-says-analyst-walter-isaacson-sees-challenges-for-tesla-ceos-federal-path">Department of Government Efficiency</a> headed by Tesla CEO <a href="https://www.benzinga.com/topic/elon-musk">Elon Musk</a>, the buyout orders, if undertaken, could have immediate negative effects on key sectors in the U.S. economy.



For example, contractors and IT services that provide defense solutions to the government such as Leidos Holdings, Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LDOS#NYSE">LDOS</a>), Booz Allen Hamilton (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BAH#NYSE">BAH</a>) and General Dynamics Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GD#NYSE">GD</a>) could be affected. Northrop Grumman Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NOC#NYSE">NOC</a>), a defense and aerospace contractor, and Lockheed Martin Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LMT#NYSE">LMT</a>) could benefit if these federal functions are outsourced.



The financial and banking sector should experience some changes. JPMorgan Chase &amp; Co (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/JPM#NYSE">JPM</a>) and Bank of America Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BAC#NYSE">BAC</a>) to mention just two, could be impacted by lending, mortgage markets and consumer spending.



Speaking of consumer spending and, judging from Pew's graph of where government workers are employed, retail giants such as Walmart Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WMT#NYSE">WMT</a>), Target Corp (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TGT#NYSE">TGT</a>) Amazon.com Inc (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/AMZN#NASDAQ">AMZN</a>) and Home Depot Inc (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HD#NYSE">HD</a>) could feel the pinch as shoppers in areas with large government employment tighten their belts.



Pew points out that, fewer than a fifth of federal workers work in or near Washington, D.C. as many might presume. California and Texas have the largest contingents of federal employees and 30,800 federal employees work overseas.



Now Read:



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<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/25/01/43309377/interest-rate-speculation-heats-up-before-fed-meeting-what-betting-markets-signal">Interest Rate Speculation Heats Up Before Fed Meeting: What Betting Markets Signals</a></li>
</ul>



Photo: Shutterstock

Government

Politics

AMZN

LDOS

Trump Memo Heard Around The World: How US Economy Could Adjust To Buyouts For Federal Workers

Editor&#8217;s note: This story has been updated with additional details. 



The Federal Reserve elected to keep interest rates unchanged at its Wednesday meeting, snapping a streak of three consecutive rate cuts <a href="https://www.benzinga.com/topic/interest-rates">that began in September.</a>



The federal funds rate remains in a target range of 4.25% to 4.5%, with a unanimous decision from the committee. In December, the Fed lowered rates by 25 basis points, bringing the total cumulative cuts for 2024 to 100 basis points.



The FOMC statement from the January meeting indicated that &#8220;economic activity has continued to expand at a solid pace&#8221; and acknowledged that while inflation has moved closer to the 2% target, it &#8220;remains somewhat elevated.&#8221; 



&#8220;The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance,&#8221; the statement added.



In its prior December projections, the Fed had upwardly revised 2025 inflation forecasts, expecting Personal Consumption Expenditures (PCE) inflation to rise to 2.5%, up from 2.1% in September. Core PCE inflation was also projected at 2.5%. 



Echoing its December policy statement, which sparked investor concerns over a more hawkish stance, the Fed reiterated that &#8220;in considering the extent and timing of additional adjustments&#8221; to interest rates, &#8220;the Committee will carefully assess incoming data, the evolving outlook, and the balance of risks.&#8221;



There were no changes to the pace of quantitative tightening. The Fed will continue reducing its holdings of Treasury securities, agency debt and agency mortgage-backed securities, as previously announced.



Investors now turn the focus to Fed Chair Jerome Powell&#8216;s <a href="https://www.youtube.com/live/VDH_CpFih-8">press conference</a>. 



<h3 class="wp-block-heading">Market Reactions</h3>



The decision to hold interest rates steady was widely expected by market participants, with both Fed futures and betting markets pricing in a near certainty of no adjustment.



Equity markets showed mixed reactions. The SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) fluctuated near the flatline by 2:05 p.m. ET, holding session losses at 0.6%. Small caps, tracked by the iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IMW#NYSE">IMW</a>) fell by 0.4%. 



Shares of Nvidia Corp. extended their losses, plunging 6% in early afternoon trading in New York, as the Trump administration vowed to impose further chip export restrictions on China.



The U.S. dollar index, tracked by the Invesco DB USD Index Bullish Fund ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/UUP#NYSE">UUP</a>), edged higher by 0.2%, supported by the Fed's cautious tone on inflation.



Treasury yields moved slightly higher, with the policy-sensitive two-year yield inching up by 3 basis points to 4.24%.



Gold prices, as mirrored by the SPDR Gold Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GLD#NYSE">GLD</a>), slipped 0.2%, while Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) fell by 0.8%.



&#8220;We do not need to be in hurry to adjust our policy stance,&#8221; Powell stated during early remarks at his press conference. 



Powell avoided answering questions about Donald Trump&#8216;s interference in Fed policy after the president explicitly called for lower interest rates during an event in Davos last week.



Sector-wise the Real Estate SPDR Select Sector Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLRE#NYSE">XLRE</a>) was the day&#8217;s worst performer, extending losses to 1.3%. 



Defensive sectors, like consumer staples and utilities, held broadly steady.



<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" title="&#x1f534;WATCH LIVE: Jerome Powell Speech &#x7C; FOMC Meeting &#x7C; Jan 29th, 2025" width="500" height="281" src="https://www.youtube.com/embed/VDH_CpFih-8?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" referrerpolicy="strict-origin-when-cross-origin" allowfullscreen></iframe>
</div></figure>



Read now: 



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<li><a href="https://www.benzinga.com/tech/25/01/43302711/nvidia-hardest-hit-among-mag-7-stocks-by-deepseek-and-this-stock-ranked-second">EXCLUSIVE: Nvidia Hardest Hit Among Mag 7 Stocks By DeepSeek, Poll Shows — And This Stock Ranked Second</a></li>
</ul>



Illustration of Federal Reserve Chair Jerome Powell created using artificial intelligence via MidJourney.

Fed Holds Interest Rates Steady, Halts Streak Of Consecutive Cuts, Says Inflation Remains 'Elevated' (UPDATED)

Shares of Starbucks Corp (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/SBUX#NASDAQ">SBUX</a>) were climbing in early trading on Wednesday after the Seattle-based company reported <a href="https://www.benzinga.com/general/restaurants/25/01/43288533/starbucks-q1-earnings-revenue-beat-eps-beat-memberships-up-1-positive-response-to-turnaround-efforts">upbeat fiscal first-quarter earnings</a>.



Here are some key analyst takeaways.



<ul>
<li>Goldman Sachs <a href="https://www.benzinga.com/analyst-stock-ratings/analyst/647713f84d196600013124ad/lizzie-dove">analyst Christine Cho</a> maintained a Buy rating, while raising the price target from $109 to $111.</li>



<li>Wedbush <a href="https://www.benzinga.com/analyst-stock-ratings/analyst/586e4054351b9b00018beea3/nick-setyan">analyst Nick Setyan</a> reiterated a Neutral rating, </li>



<li>Bank of America Securities <a href="https://www.benzinga.com/analyst-stock-ratings/analyst/58f614b50bd9910001a77ada/sara-senatore">analyst Sara Senatore</a> reaffirmed a Buy rating and price target of $120.</li>



<li>Piper Sandler <a href="https://www.benzinga.com/analyst-stock-ratings/analyst/5df37c17bffdfc0001d738fc/brian-mullan">analyst Brian Mullan</a> maintained an Overweight rating and price target of $110.</li>



<li>RBC Capital Markets <a href="https://www.benzinga.com/analyst-stock-ratings/analyst/6645dc02eba8c50001257ef4/logan-reich">analyst Logan Reich</a> reiterated an Outperform rating and price target of $115.</li>



<li>Stifel <a href="https://www.benzinga.com/analyst-stock-ratings/analyst/59d376ec6ab1240001daf924/chris-o%27cull">analyst Chris O&#8217;Cull</a> reaffirmed a Buy rating and price target of $114.</li>



<li>Oppenheimer <a href="https://www.benzinga.com/analyst-stock-ratings/analyst/586bcbd9351b9b0001ab738c/matthew-boss">analyst Brian Bittner</a> maintained a Perform rating on the stock.</li>
</ul>



Check out <a href="https://www.benzinga.com/analyst-stock-ratings">other analyst stock ratings</a>.



Goldman Sachs: Starbucks reported its fiscal first-quarter earnings at 69 cents per share. That&#8217;s modestly ahead of the consensus of 67 cents per share. Total revenues beat the consensus by around 1%. 



The decline in same-store sales was less than expected. Operating margins were in-line with estimates, "driven by supply chain and in-store efficiencies," Cho said in a note.



"Although still in early stages, we believe the company is focusing and investing in the right places to drive a meaningful turnaround in its North American business," the analyst wrote. With several initiatives in place, the company's same-store sales growth could turn "modestly positive" in the fiscal second quarter, "with further sequential improvements" in the second half of the year, she added.



Wedbush: Starbucks recorded a 4% decline in U.S. same-store sales, better than expectations of a 5.2% decline, Setyan said. The 4% decline in international same-store sales and 6% decline in China same-store sales were also better than consensus of declines of 5.8% and 8.3%, respectively, he added.



The company's performance in the fiscal first quarter shows signs of stabilization, suggesting "flat-to-positive [same-store sales] growth earlier than expectations," the analyst stated. This is against easier comps and the "heavy lifting remains," Setyan added. 



BofA Securities: Starbucks' underlying comp improvement through the fiscal first quarter "seems to have carried into" the second quarter, Senatore said. The company's year-on-year earnings growth could trough in the second quarter, she added.



"Growth should improve sequentially through 3Q and 4Q as positive comps offset moderating investments (which are accelerated in 2Q)," the analyst wrote. Although Starbucks has not guided to positive year-on-year growth in the back half of the year, earnings growth could turn "slightly positive," she further stated.



Piper Sandler: Starbucks U.S. same-store sales of down 4% was better than expectations and represents an almost stable sequential trend for two years, Mullan said. If the company maintains this performance, U.S. same-store sales could turn positive in the fiscal second quarter. That&#8217;s sooner than what the consensus currently expects, he added.



Management aims to simplify the menu and reduce around 30% of items in both food and beverages by the end of 2025. This reaffirms the thesis that the new CEO, Brian Niccol, is going to "fix the business the right way,&#8221; the analyst stated.



Starbucks appointed Niccol CEO <a href="https://www.benzinga.com/markets/equities/24/08/40338228/starbucks-appoints-chipotle-mexican-grill-veteran-as-new-ceo-stock-soars">last August</a>. 



RBC Capital Markets: The ongoing changes to Starbucks' North America business "are starting to show signs of improvement," while the performance is also improving in China, Reich said. 



CFO Rachel Ruggeri suggested lower supply chain cost savings than previously expected.



"While the core business appears to be moving in the right direction, the company expects earnings to remain pressured, as restructuring costs, higher SBC, and potentially lower efficiency-driven cost savings are NT headwinds to margins," the analyst wrote. Some of these headwinds could be temporary and cost savings from the initiatives may begin to materialize "toward the end of the fiscal year and into 2026," he further stated.



Stifel: "We are encouraged by the progress the company is making to get &#8216;Back to Starbucks&#8217; and expect comps to return to positive territory as early as F2Q25," O'Cull wrote in a note. Several initiatives are underway, including reintroducing the brand to non-loyalty members, new order sequencing to eliminate bottlenecks and optimizing staffing levels, he added.



Management expects earnings to trough on a year-on-year basis in the fiscal second quarter, "impacted by seasonality and organizational restructuring," the analyst stated. Earnings should improve in the back half of the year, both sequentially and year-on-year basis. Analysts expect the company's overall margin performance "to follow a similar pattern," he further wrote.



Oppenheimer: Management expects global same-store sales to turn positive in the fiscal second quarter. The Street's current estimate is a 1.2% decline, Bittner said. This is likely to be "driven primarily by <a>North America</a>," he added.



&#8220;Trends appear to be bottoming under Brian Niccol&#8217;s leadership, with a favorable setup as comparisons ease,&#8221; the analyst stated. 



The Oppenheimer team struggles to identify a clear path for same-store sales, margin, and EPS upside now baked into &#8220;fiscal &#8217;26E consensus estimates."



Price Action: Shares of Starbucks had risen by 6.83% to $107.27 at the time of publication on Wednesday.



Read More: 



<ul>
<li><a href="https://www.benzinga.com/25/01/43307504/brinker-international-posts-upbeat-results-joins-f5-t-mobile-us-starbucks-and-other-big-stocks-moving-higher-on-wednesday">Brinker International Posts Upbeat Results, Joins F5, T-Mobile US, Starbucks And Other Big Stocks Moving Higher On Wednesday</a></li>
</ul>



Image: Shutterstock

Analyst Color

Price Target

Reiteration

SBUX

Starbucks Posts Earnings Beat: New CEO Will 'Fix The Business The Right Way,' Analyst Says

Caution dominates Wednesday's midday trading session in New York as investors anxiously await the Federal Open Market Committee decision <a href="https://www.benzinga.com/topic/interest-rates">at 2 p.m. ET</a>.



The Fed is widely expected to keep interest rates unchanged at 4.25%-4.5%. Market participants remain highly focused on any signals from Fed Chair Jerome Powell regarding the path forward for rate cuts.



The December meeting delivered a shock to markets, with Powell adopting a more hawkish tone than anticipated, suggesting that interest rates have moved closer to a neutral zone.



This FOMC meeting is also the first since Donald Trump's administration took office, fueling speculation over whether Powell will address questions about the president's pledge to &#8220;lower interest rates immediately.&#8221;



Major equity indices are little changed, with tech stocks under slight pressure as Nvidia Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>) fell 5%, weighing on the sector. Tech titans Microsoft Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MSFT#NYSE">MSFT</a>) and Meta Platforms Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>) will report earnings after the close, with investors awaiting management clarity over the DeepSeek AI competitive threat.



Among sectors, financial stocks — tracked by the Financial Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLF#NYSE">XLF</a>) — hit fresh record highs, while communication services are on pace for their eighth consecutive session of gains.



The dollar and Treasury yields remain mostly flat ahead of the Fed's announcement. Commodities are mixed, with gold and oil down 0.4% and 0.9%, respectively, while silver and copper rise 1.2% and 1.1%.



Bitcoin (CRYPTO: <a class="ticker" href="https://www.benzinga.com/quote/btc/usd">BTC</a>) is up 1% to $102,300, potentially snapping a four-session losing streak.



<h3 class="wp-block-heading">Wednesday&#8217;s Performance In Major US Indices, ETFs</h3>



<figure class="wp-block-table is-style-stripes"><table style="overflow:auto; height: 90px; display: block;"><tbody><tr><td>Major Indices</td><td>Price</td><td>1-day %chg</td></tr><tr><td>Dow Jones</td><td>44,901.37</td><td>0.1%</td></tr><tr><td>Russell 2000</td><td>2,285.29</td><td>-0.2%</td></tr><tr><td>S&amp;P 500</td><td>6,055.43</td><td>-0.2%</td></tr><tr><td>Nasdaq 100</td><td>21,412.74</td><td>-0.2%</td></tr></tbody></table><figcaption class="wp-element-caption">Updated at 12:30 p.m. ET</figcaption></figure>



According to&nbsp;<a href="https://bzresearch.myclickfunnels.com/benzinga-pro-content-webinar-registration/?utm_source=BZprocontent012925&amp;t=be2bearmibe3na1" target="_blank" rel="noreferrer noopener">Benzinga Pro</a>&nbsp;data:



<ul>
<li>The SPDR S&amp;P 500 ETF Trust (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SPY#NYSE">SPY</a>) inched 0.2% lower to $603.11.</li>



<li>The&nbsp;SPDR Dow Jones Industrial Average&nbsp;(NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DIA#NYSE">DIA</a>)&nbsp;is flat at $448.62.</li>



<li>The tech-heavy Invesco QQQ Trust Series (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/QQQ#NASDAQ">QQQ</a>) edged 0.2% lower to $520.88.</li>



<li>The iShares Russell 2000 ETF (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IWM#NYSE">IWM</a>) is flat at $226.81.</li>



<li>The Communication Services Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLC#NYSE">XLC</a>) is outperforming, up 0.8%; the Technology Select Sector SPDR Fund (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/XLU#NYSE">XLU</a>) is lagging, down 0.9%.</li>
</ul>



Wednesday&#8217;s Stock Movers



<ul>
<li>T-Mobile US Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TMUS#NASDAQ">TMUS</a>) soared nearly 8% in reaction to stronger-than-expected quarterly results.</li>



<li>Other stocks reacting to company earnings include Starbucks Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/SBUX#NYSE">SBUX</a>), up 6.7%, Chubb Ltd. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/CB#NYSE">CB</a>), up 3%, F5 Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/FFIV#NASDAQ">FFIV</a>), up 13%, ASML Holding N.V. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ASML#NASDAQ">ASML</a>) up 3.6%, Danaher Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/DHR#NYSE">DHR</a>), down 9%, The Progressive Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/PGR#NYSE">PGR</a>), up 1.4%, Automatic Data Processing Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/ADP#NASDAQ">ADP</a>), up 2.9%, General Dynamics Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/GD#NYSE">GD</a>), down 3.2%, Norfolk Southern Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NSC#NYSE">NSC</a>), up 3.1%, MSCI Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/MSCI#NYSE">MSCI</a>), down 3.9%, Nasdaq Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NDAQ#NASDAQ">NDAQ</a>), up 0.9%, Hess Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/HES#NYSE">HES</a>), up 0.6% and Teva Pharmaceuticals Ltd. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/TEVA#NYSE">TEVA</a>), down 13.8%. </li>



<li>Major companies reporting earnings after the close other than Microsoft and Meta include Tesla Inc. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/TSLA#NASDAQ">TSLA</a>), ServiceNow Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/NOW#NYSE">NOW</a>), International Business Machines Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/IBM#NYSE">IBM</a>), Lam Research Corp. (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/LRCX#NASDAQ">LRCX</a>), Raymond James Financial Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/RJF#NYSE">RJF</a>), Ameriprise Financial Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/AMP#NYSE">AMP</a>), Waste Management Inc. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/WM#NYSE">WM</a>) and Las Vegas Sands Corp. (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/LVS#NYSE">LVS</a>). </li>
</ul>



Read Next:



<ul>
<li><a href="https://www.benzinga.com/analyst-ratings/analyst-color/25/01/43304027/deepseek-selloff-is-a-correction-not-start-of-sustained-bear-market-goldman-sachs">DeepSeek Selloff Is A Correction, Not Start Of &#8216;Sustained Bear Market&#8217;: Goldman Sachs</a></li>
</ul>



Illustration created using artificial intelligence via Midjourney.

Sector ETFs

ASML

FFIV

LRCX

MSCI

NDAQ

TEVA

TMUS

Stocks Tick Down Ahead Of Fed Meeting, Nvidia Jitters Resume, Trump Media Rallies: What's Driving Markets Wednesday?

<a href="https://www.benzinga.com/topic/alibaba" target="_blank" rel="noreferrer noopener">Chinese e-commerce giant</a> Alibaba Group Holding Limited (NYSE:<a class="ticker" href="https://www.benzinga.com/stock/BABA#NYSE">BABA</a>) released a new version Wednesday of its Qwen large language model, known as Qwen2.5 Max, which it said topped DeepSeek's AI model across various benchmarks.



Alibaba Cloud said Qwen2.5 Max impressed versus OpenAI's GPT-4o, DeepSeek-V3, and&nbsp;Meta Platforms Inc's (NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/META#NASDAQ">META</a>) Llama-3.1-405B in specific benchmarks, the Wall Street Journal <a target="_blank" href="https://www.wsj.com/tech/ai/alibaba-unveils-upgraded-ai-model-claims-it-surpasses-rival-deepseek-v3-506b7f28?mod=tech_lead_story" rel="noreferrer noopener">reports</a>.



Alibaba announced that Qwen2.5-Max is now available in Qwen Chat.



Also Read: <a target="_blank" href="https://www.benzinga.com/25/01/43302340/deepseeks-ai-breakthrough-microsoft-poised-to-benefit-but-oracle-faces-cloud-growth-challenges" rel="noreferrer noopener">DeepSeek's AI Breakthrough Benefits Microsoft, But Oracle Faces Cloud Growth Challenges: Analyst</a>



In the newly released family of AI models, <a target="_blank" href="https://github.com/QwenLM/Qwen2.5-VL/blob/main/README.md" rel="noreferrer noopener">Qwen2.5-VL</a> can parse files, comprehend videos, count objects in images, and control a PC.



This model is similar to the one powering OpenAI's recently launched&nbsp;Operator. Qwen2.5-VL model claimed to beat OpenAI's&nbsp;GPT-4o, Anthropic's&nbsp;Claude 3.5 Sonnet, and Google's&nbsp;Gemini 2.0 Flash&nbsp;in various video understanding, math, document analysis, and question-answering evaluations.



Just over a week ago, Chinese AI startup DeepSeek launched its latest open-source AI model, R1. R1 said it excelled at problem-solving, performing on par with OpenAI's GPT-4o reasoning model–but at a fraction of the cost per use.



DeepSeek's AI assistant app recently topped iPhone download rankings in the U.S.



Cloud providers, including Alibaba and Tencent Holdings (OTC:<a class="ticker" href="https://www.benzinga.com/stock/TCEHY#OTC">TCEHY</a>), have doled discounts to win market share.



<a href="https://www.benzinga.com/markets/emerging-markets/25/01/43260751/not-just-deepseek-alibaba-unveils-ai-model-to-rival-openais-operator" target="_blank" rel="noreferrer noopener">U.S. tech stocks</a> plunged on Monday as DeepSeek R1&nbsp;made the market nervous over the sustainability of the AI technology investment.&nbsp;Nvidia Corp&nbsp;(NASDAQ:<a class="ticker" href="https://www.benzinga.com/stock/NVDA#NASDAQ">NVDA</a>)&nbsp;lost $600 billion in market cap.



Price Action:&nbsp;BABA stock is up 4.21% at $100.07 at the last check on&nbsp;Wednesday.



Also Read:



<ul>
<li><a href="https://www.benzinga.com/25/01/43285369/asml-lam-research-and-kla-lead-semicap-growth-as-ai-and-tech-upgrades-drive-105-billion-market-outlook" target="_blank" rel="noreferrer noopener">DeepSeek Sell-off Offers Opportunities On Semicaps, Analyst Bumps Up Price Forecasts For KLA, Nova And Camtek</a></li>
</ul>



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Alibaba Ups AI Game, Says Its Qwen2.5 Max Beats DeepSeek and OpenAI In Performance

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