Nasdaq slides, Dow stalls ahead of Fed decision, Big Tech earnings bonanza

Fed Chair Jay Powell is set to take questions from the media at 2:30 p.m. ET.

And while the Fed is expected to hold rates steady, and Powell will get expected questions around how Trump’s policies — and the president’s jawboning on rates — could weigh on the Fed’s plans, I think there’s a wild card topic Powell could be asked about: chips.

Nvidia stock was falling Wednesday afternoon amid another report the Trump admin may look to curb sales of the company’s chips to China.

This follows the market panic over the capabilities of Chinese AI model DeepSeek, and the subsequent questions and accusations about where the company behind the LLM got their computing power, how they used competitor APIs, and so on.

Powell may decline to answer questions that are, in the end, about national security and industrial policy.

But we wouldn’t rule it out.

Nvidia (NVDA) stock hit its lows of the day after Bloomberg reported that Trump administration officials are “exploring additional curbs” on Nvidia’s chip sales to China.

The news comes amid. volatile week for Nvidia stock which saw the worst one day market cap loss in history on Monday, with shares sliding nearly 17%, as investors digested the growing popularity of a new cost-effective artificial intelligence model from the Chinese startup DeepSeek.

Yahoo Finance’s Ben Werschkul reports:

Donald Trump’s pick for commerce secretary underlined that broad, country-by-country tariffs can be used to address a host of economic issues, including the protection of America’s artificial intelligence lead.

“I prefer across the board” tariffs, Howard Lutnick told senators during his confirmation hearing Wednesday just days ahead of a key deadline that could see these types of blanket duties in place on Canada, Mexico, and China.

He also linked tariffs to a debate this week about AI export controls, which he would oversee if confirmed, saying that such controls without the backing of tariffs lead to “a whack-a-mole model.”

Read more here.

About 90 minutes before the Federal Reserve’s next decision on interest rate is expected, the S&P 500 is down about 0.3%.

Information Technology led the losses in the benchmark index, falling more than 0.8.%, led by a more than 4% drop in Nvidia (NVDA).

Nvidia (NVDA) stock tanked on Monday, falling more than 17% and losing nearly $600 billion off its market cap, as investors digested a new cost-effective artificial intelligence model from the Chinese startup DeepSeek.

But retail investors bought the dip. Data from VandaTrack shows retail investors bought more than $562 million of the name on Monday, the largest single-day inflow into the stock in VandaTrack’s data. On Tuesday, as the stock rebounded and rose roughly 9%, there was once again a large swath of retail buying totaling nearly $360 million. Across the two days of chaotic market action, retail investors sent more than $920 million into shares of Nvidia.

Wall Street strategists largely agreed with retail’s bullish outlook on the name.

“We think this is probably going to end up a buy-the-dip Nvidia moment,” Fundstrat head of Research Tom Lee said in a video to clients on Monday night.

Bernstein’s Stacy Rasgon told Yahoo Finance’s Seana Smith the DeepSeek-driven sell-off was “overblown.” Rasgon added that the new developments don’t spell out “doomsday for AI infrastructure.”

Starbucks (SBUX) shares are up more than 5% after reporting quarterly results.

Yahoo Finance’s Brian Sozzi reports:

Starbucks CEO Brian Niccol is promising more caffeinated growth but isn’t yet ready to put hard projections around when.

And for now, that continues to be enough for Wall Street.

On its earnings call, the company highlighted improved sequential sales trends in the US as it worked to speed up mobile orders and end upcharging for dairy substitutes, among other changes.

“I think we’re definitely in the middle of a turnaround,” Niccol said on Yahoo Finance.

Read more here.

It’s been a whipsaw week of trading action for AI leader Nvidia (NVDA).

The stock lost a record $589 billion in market cap on Monday, with shares falling roughly 17% as a new artificial intelligence model from China’s DeepSeek raised questions about AI investment and the rise of more cost-efficient AI agents.

Then Tuesday brought a rebound, with the stock closing 9% higher. But Wednesday’s early action saw the the stock fall nearly 4%. That shows the AI chipmaker isn’t out of the woods yet, as investors await earnings results from key Nvidia customers after the bell in Microsoft (MSFT), Meta (META), and Tesla (TSLA).

ASML (ASML) stock rose 6% early Wednesday after the Dutch semiconductor equipment company posted better-than-expected fourth quarter earnings and its CEO dismissed concerns that DeepSeek’s breakthrough would hurt demand for AI chips.

ASML sells highly complex machines to chip manufacturers such as TSMC (TSM), which uses those machines to produce chips for Nvidia (NVDA), Apple (AAPL), and other tech heavyweights.

The Dutch firm on Wednesday reported earnings per share of 6.85 euros ($7.12), ahead of the 6.68 euros expected. Its quarterly revenue of 9.2 billion euros topped the 9 billion euros forecast, according to Bloomberg consensus estimates.

ASML also posted stronger-than-expected order bookings, reflecting strong demand from AI chipmakers for its advanced tools.

Meanwhile, its CEO Christophe Fouquet told CNBC in an interview about the impact of DeepSeek’s new AI models: “We see that as an opportunity for more chips demand.”

Read the full story here.

Stocks wavered on Wednesday morning with the broader mood muted ahead of the first Big Tech earnings and the Federal Reserve’s rate decision.

The tech-heavy Nasdaq Composite (^IXIC) fell more than 0.3%, after a bounce-back rally on Tuesday. The S&P 500 (^GSPC) was down about 0.2%, while the Dow Jones Industrial Average (^DJI) was just above the flat line.

The looming Fed policy verdict is providing reason for markets to tread carefully, even though the central bank is expected to stand pat on interest rates.

Trump Media & Technology Group (DJT) shares rose nearly 15% in premarket trading after the company linked to President Donald Trump announced an expansion into financial services.

The operator of Truth Social will launch a financial services and fintech brand dubbed “Truth.Fi.”

The board approved a $250 million investment of its cash reserves into customized separately managed accounts (SMAs), customized exchange-traded funds (ETFs), as well as bitcoin (BTC-USD) and similar cryptocurrencies or crypto-related securities.

“We began by creating a free-speech social media platform, added an ultra-fast TV streaming service, and now we’re moving into investment products and decentralized finance,” TMTG CEO and chairman Devin Nunes said in the release.

“Developing American First investment vehicles is another step toward our goal of creating a robust ecosystem through which American patriots can protect themselves from the ever-present threat of cancellation, censorship, debanking, and privacy violations committed by Big Tech and woke corporations.”

Oppenheimer has joined its peers at Loop Capital and Jefferies in cutting its rating on shares of Apple (AAPL) in the run-up to the company’s fiscal first quarter results, due out after the bell tomorrow.

OpCo cut its rating on Apple to Perform from Outperform, according to a report from Bloomberg, with the firm citing slowing iPhone sales and a lack of AI innovation, similar cases to those made by Loop and Jefferies last week.

On Monday, Apple was a market leader amid a washout in AI-related plays, most notably Nvidia (NVDA), which lost nearly $600 billion in market value. This was a silver lining of sorts during a period in which the company has been a notable laggard relative to its peers in deploying AI across its product line.

And with Apple set to report results for its holiday quarter on Thursday — its most important quarter of the year for iPhone sales — Wall Street is bracing its clients for a mild disappointment.

Economic data: MBA Mortgage Applications (week ended Jan. 24); FOMC rate decision

Earnings: Tesla (TSLA), Meta (META), Microsoft (MSFT), ADP (ADP), ASML (ASML), General Dynamics (GD), IBM (IBM), Nasdaq (NDAQ), Progressive (PGR), ServiceNow (NOW), T-Mobile (TMUS), V.F. Corporation (VFC)

Here are some of the biggest stories you may have missed overnight and early this morning:

The biggest Fed change investors will see coming

Alibaba releases AI model it says is better than DeepSeek

Chip stocks set to extend recovery after DeepSeek reckoning

OpenAI says it has proof DeepSeek used its model for training

Fed expected to hold rates steady as Trump dials up pressure

ASML stock surges as AI investments fuel orders

Trump is turning TikTok’s fate into a public bidding war

Tesla earnings: New catalyst needed as Trump rally fades