Markets Overview

  • ASX SPI 200 futures little changed at 8,904.00
  • S&P 500 little changed at 6,976.23
  • Dow Average little changed at 48,960.91
  • Aussie little changed at 0.7012 per US$
  • US 10-year yield little changed at 4.2472%
  • Australia 3-year bond yield fell 4.7 bps to 4.26%
  • Australia 10-year bond yield fell 3 bps to 4.81%
  • Gold spot up 2.9% to $5,331.49
  • Brent futures up 1.2% to $68.38/bbl

Economic Events

  • 10:30: (AU) Australia to Sell A$1 Billion 203-Day Bills on Jan. 29
  • 10:30: (AU) Australia to Sell A$1 Billion 98-Day Bills on Jan. 29
  • 10:30: (AU) Australia to Sell A$2 Billion 133-Day Bills on Jan. 29
  • 11:30: (AU) 4Q Export Price Index QoQ, prior -0.9%
  • 11:30: (AU) 4Q Import Price Index QoQ, prior -0.4%

The Federal Reserve’s decision to leave rates steady sent stocks and bonds wavering, with Jerome Powell refraining from signaling any imminent resumption of rate cuts amid a solid economy. The dollar rose as Treasury Secretary Scott Bessent touted a strong currency.

Bonds barely budged. Following a tech-led rally that drove the S&P 500 briefly above 7,000, equity gains faded. In late hours, Meta Platforms Inc. jumped on a bullish outlook. Tesla Inc. climbed as profit beat estimates. Microsoft Corp. sank as record spending raised concerns that it will take longer than expected for artificial-intelligence investments to pay off.

Powell talked up a “clear improvement” in what’s expected for the economy in the year ahead. The Fed chief reiterated the labor market has shown signs of stabilizing, but added, “I wouldn’t go too far with that,” noting there were also signs of cooling. He demurred when asked what it may take for the committee to cut again.

“The Fed song remains the same — lower interest rates may be coming, but investors will have to remain patient,” said Ellen Zentner at Morgan Stanley Wealth Management. “With signs of stabilization in the labor market and inflation holding steady, the Fed is in position to play the wait-and-see game.”

The Federal Open Market Committee voted 10-2 to hold the benchmark federal funds rate in a range of 3.5%-3.75%. Governors Christopher Waller and Stephen Miran dissented in favor of a quarter-point reduction.

Just two dissents underscored how tight the consensus is, which means any new Fed Chair that comes in after Powell’s term is up will have a hard time convincing other officials that rates need to go much lower, according to Sonu Varghese at Carson Group.

“The Fed is likely on an extended pause with strong activity data and signs of stabilization in the labor market suggesting little need to take out further insurance,” said Kay Haigh at Goldman Sachs Asset Management. “However, we expect easing to resume later in the year as a moderation in inflation allows for two further ‘normalization’ cuts.”

The S&P 500 was little changed. The yield on 10-year Treasuries was little changed at 4.25%. The dollar climbed 0.4%. Bessent told CNBC the US hasn’t intervened to strengthen the yen, sending the Japanese currency slumping almost 1%. Gold topped $5,300.