Overview
- The Federal Open Market Committee voted to keep the federal funds rate at 3.50%–3.75% on Wednesday after a 9-3 split in which three officials wanted a 25 basis-point hike.
- Long-term U.S. Treasury yields jumped to multi-decade highs after the Fed meeting, with the 30-year yield moving above 5.2%, and U.S. equities suffered steep losses including an intraday Dow drop of roughly 1,100 points.
- Investors sharply reappraised the payoff from massive AI spending, sending semiconductor and other AI-exposed stocks lower after SK Hynix’s results disappointed lofty expectations and concentrated positioning amplified the selloff.
- Earnings this week showed divergent outcomes for big tech that fed market moves: Microsoft beat estimates and reassured on cash generation while Meta reported a steep drop in free cash flow and its shares fell sharply.
- Renewed Middle East strikes pushed oil higher and kept inflation fears elevated, a development that could increase pressure on the Fed to tighten later this year and create further volatility for markets and retail investors in places like South Korea.