Markets Daily: Powell relief

Market data as of 06:07 am EST. Market data may be delayed depending on provider agreements. Fed Chair Jerome Powell downplayed mounting gro

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Markets Snapshot S&P 500 Futures 5,728.5 -0.02% Stoxx Europe 600 Index 552.01 -0.61% US 10-Year Treasury Yield 4.222% -0.021 Hang Seng Index 24,219.95 -2.23% Borsa Istanbul 100 Index 10,051.53 +1.94% Market data as of 06:07 am EST. View or Create your Watchlist Market data may be delayed depending on provider agreements.

Five things you need to know

Fed Chair Jerome Powell downplayed mounting growth concerns and the price hits that could be on the way from President Donald Trump's aggressive trade war. The optimism from Powell's comments faded a bit this morning, with European stocks declining on renewed concern about the economic outlook. US stock-index futures were little changed and bonds rose again. Russia and Ukraine exchanged mass drone attacks overnight, even as the two countries declared they're ready to observe a moratorium on strikes against energy infrastructure sought by US President Donald Trump. It's a big day for central banks: The Swiss National Bank cut its interest rate to the lowest since September 2022, while Sweden's Riksbank kept its rate unchanged at a two-year low and reiterated it's finished with the easing cycle. The Bank of England later today is likely to turn less dovish because of the tariff wars and a renewed bout of inflation. The selloff in Turkish assets eased as authorities announced steps to curb volatility after the detention of President Recep Tayyip Erdogan's main political rival sparked a market rout.

Powell relief

Recession odds, while higher, aren't alarming. Inflation, while still sticky, isn't worth fretting over. And trade policy? It'll become clear when it becomes clear. In short, Federal Reserve Chair Jerome Powell said, there's no reason to do anything with the current path of monetary policy. For battered stock bulls, the message was a relief. The S&P 500 Index climbed 1.1%, the biggest Fed-decision day gain since July, while the Nasdaq 100 Index jumped 1.3%, even if the optimism has cooled off a bit this morning. Even bond investors — who often have the opposite reaction to Fed messaging than stock investors — were encouraged by Powell's stay-the-course tone. They bid up prices, pushing benchmark 10-year yields down for a third day in a row. It was the first time in eight months both assets rose in tandem after a Fed decision. "Traders see through stagflation concerns because officials are still easing policy," said Scott Colyer, chief executive at Advisors Asset Management. "The Fed is signaling to the market that central bankers are getting ahead of any potential liquidity concerns that may arise later down the road if growth takes a hit from tariffs and unemployment rises." Bond investors seized on the fact that the central bank dialed back its growth forecasts for this year, validating some of the concerns that Donald Trump's trade war and spending cuts will cool the economy. And that supported speculation the Fed will cut interest rates twice in 2025, as policymakers indicated with their latest projections. "What the Treasury market honed in on is that this seemed to be more tilted or skewed toward growth uncertainty rather than longer-term inflation uncertainty," said Kevin Flanagan, head of fixed-income strategy at WisdomTree. "And the fact Powell said 'tariffs are transitory' underscores the point." —Jessica Menton and Michael Mackenzie

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On the move

Carvana shares rises 3.6% in premarket trading. Piper Sandler upgrades the used-car retailer and ACV Auctions to overweight from neutral as the broker turns bullish on the sector, saying the companies can can grow despite economic unease and higher tariffs. Rivian is down 1.9% and the US-listed shares in Stellantis are 3.9% lower after Piper Sandler downgrades the carmakers to neutral from overweight, saying that "for most stocks in the car manufacturing supply chain, there's too much political uncertainty." Five Below jumps 12%  after the discount retailer reported fourth-quarter results that beat expectations and gave a sales outlook that is above the analyst consensus.  Sodexo slumps 18% in Paris. The food-services company lowered its revenue guidance, citing slower growth at its US university business. Bloomsbury rises 7.5% in London. CEO Nigel Newton notes that the renewed popularity of cookbooks and unabated enthusiasm for literary fiction is a boon to the publisher. Nvidia rises  1.1%. The chip giant aims to spend several hundred billion dollars to procure US-made chips and electronics over the next four years, according to a report in the Financial Times. FedEx, Nike and Micron Technology are slated to report results after the market closes on Thursday. — Subrat Patnaik

Copper shines

There's one Trump trade that hasn't gotten much attention this year: Copper. The metal in London trading has surpassed the $10,000 a ton mark again after weeks of global dislocation triggered by the US president's push for tariffs on the crucial industrial commodity.  Trump last month ordered the Commerce Department to investigate copper imports — a likely precursor to imposing duties. Since then, US prices have spiked and traders have scrambled to send metal to America ahead of any tariffs, in turn reducing availability in the rest of the world. "This is a round of cross-regional repricing triggered by potential US tariffs," said Wei Lai, deputy trading head at Zijin Mining. "Cargoes are lured to the US, leaving other places in shortfall.'' Also, copper typically benefits from a weaker dollar, and the greenback has softened since Trump returned to the White House. Finally, the metal has support from tight spots in its supply chain: Smelters are suffering as a frenzy of expansions has left them fighting to secure raw materials. Copper is mostly traded as a hedge by industrial companies, and by fast-money commodity speculators. But Wall Street of course has churned out plenty of products aimed at retail investors. A quick search on the Bloomberg shows 59 exchange-traded products around the world that have copper in their name. Here's how the two biggest have done this year: The quick takeaway is that the London-traded WisdomTree fund (ticker COPA LN), which tracks copper futures, is doing better than the Global X product (COPX), which owns shares of almost 50 miners. The real money, of course, has been made and lost on leveraged funds. A WisdomTree fund (3HCL LN) that makes a triple leveraged bet on copper has returned 87% this year, while a triple leveraged short bet — also from WisdomTree (3HCS LN) — has lost 52%. —Paul-Alain Hunt, Winnie Zhu and Phil Serafino

Inflation beneficiaries

Oil and gas is another commodity sector that's doing well in the stock market: The group is the best performer in the S&P 500 in 2025 after trailing badly the past two years. Lingering inflation anxiety, a supportive administration — President Donald Trump met with oil executives yesterday — as well as intensifying geopolitical tensions have fueled the strength in the shares. With long-term inflation expectations surging, the sector's hedging appeal is key for investors looking to gird their portfolios against the risk of rising price pressures. Simon Lack, a portfolio manager for the Catalyst Energy Infrastructure Fund, says the sector remains underappreciated even after its recent climb.  "Energy's going to outperform," he said. The White House "really likes US energy and wants us to export more." — Geoffrey Morgan On the new episode of Trumponomics: Bloomberg Economics Chief Economist Tom Orlik explains the Trump administration is possibly more strategic than it seems. He offers historical perspective on Trump's moves and says the bumpy road may take the economy to a better long-term destination. Listen on Apple, Spotify, or wherever you get your podcasts.

Word from Wall Street "We think the Fed will find it difficult to cut more than once or twice this year – even if prolonged uncertainty starts to hurt otherwise healthy growth. That's why we would lean against yesterday's move in US Treasuries and pricing in of more Fed cuts." Jean Boivin Head of  the BlackRock Investment Institute

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