Overview
Futures tied to the main U.S. stock benchmarks advanced on Thursday as investors parsed a Federal Reserve interest rate decision and a series of high-profile technology earnings reports. The central bank left its policy rate unchanged and officials emphasized the underlying strength of the U.S. economy, while large technology companies highlighted continued, sizable capital commitments to artificial intelligence infrastructure. Precious metals climbed to fresh highs as geopolitical tensions and currency moves supported demand for safe-haven assets.
Futures and recent market moves
By 03:02 ET (08:02 GMT), futures showed modest gains for major indexes. The Dow futures contract was mostly flat, S&P 500 futures were up 13 points, or roughly 0.2%, and Nasdaq 100 futures had risen by 85 points, or about 0.3%. The S&P 500 recently pushed past the 7,000 mark for the first time, a milestone reached amid optimism around artificial intelligence and anticipation of potential Fed rate cuts later in the year. Analysts at Vital Knowledge noted that the tech sector was a central driver, with numerous firms reporting strong results and issuing upbeat guidance.
That uplift in equities has come against a backdrop of relative economic resilience despite ongoing geopolitical and trade uncertainty. The S&P 500 has gained approximately 1,000 points since November 2024, reflecting concentrated strength among large-cap technology names and investor expectations about the policy path ahead.
Federal Reserve decision and reaction
The Federal Reserve left its target interest rate unchanged at a range of 3.5% to 3.75% as widely expected. Policymakers on the Fed's 12-member rate-setting committee largely agreed to maintain the current stance, citing evidence of economic solidity and a labour market that has stabilized. Two members of the board - Stephen Miran, a temporary appointee, and Christopher Waller, a candidate to become the next Fed Chair - supported a quarter-point reduction instead of the unanimous pause.
Political pressure on rate policy has been a recurring theme. President Donald Trump has urged more aggressive and rapid rate cuts in order to support the economy, making current Fed Chair Jerome Powell a focal point of criticism. Those tensions have raised concerns about threats to the Fed’s independence, concerns that were amplified earlier this month when a Justice Department investigation into Powell was launched. Powell, who previously publicly rebuked the investigation, chose not to expand on the matter during the post-decision press conference and instead concentrated on economic fundamentals and inflation dynamics.
During the session, Powell suggested the inflationary effect of the tariffs enacted by President Trump could abate in the near term. He also said that while a rate increase in the near future was not entirely ruled out, such an outcome was not the prevailing expectation at the moment.
Market participants noted that the Fed’s slightly more optimistic assessment of growth may signal that the easing cycle, which included multiple cuts last year, is approaching its end. In the wake of the policy announcement, the U.S. dollar continued to weaken against a basket of currencies.
Tech earnings - AI spending front and centre
Earnings from flagship technology companies kept the spotlight on substantial investment in artificial intelligence. Both Meta Platforms and Microsoft used their quarterly reports to reaffirm aggressive AI spending plans, reflecting a broader industry trend toward building the computational backbone for advanced AI models, including data centers and specialized chips.
Meta disclosed that it expects capital expenditures to rise as high as $135 billion this year, a level well above Wall Street expectations and nearly double the planned total for 2025. The Instagram owner also posted record fourth-quarter sales, a performance that appeared to ease investor concerns and supported its stock in after-hours trading.
Microsoft likewise reported higher-than-anticipated AI-related spending, a factor that weighed on its shares. The company cited a slowdown in growth for its Azure cloud division relative to the prior quarter, which contributed to investor caution despite continued commitment to AI infrastructure.
Analysts and market observers noted that while firms are scaling up AI investments rapidly, pressure is mounting for demonstrable returns from those expenditures. The industry-wide increase in spending on data centers, chips, and other infrastructure is substantial, but investors are watching for signs that these investments will translate into durable revenue and profit growth.
Tesla’s results and AI investment
Tesla reported fourth-quarter results that beat Wall Street estimates and highlighted a strategic shift toward integrating artificial intelligence with its hardware offerings. Adjusted earnings per share were $0.50 on revenue of $24.9 billion, exceeding consensus estimates of $0.45 and $24.78 billion respectively. Tesla's shares rose about 2.7% in after-hours trading following the announcement.
The company’s board approved a $2 billion investment in xAI, Elon Musk’s private AI startup, as part of an effort to meld digital intelligence with physical products. Company leadership described 2025 as a transformative year that marked Tesla's evolution from a predominantly hardware-focused firm to what it called a physical AI company. That repositioning comes even as Tesla’s core automotive revenue declined by 11% year-over-year in the quarter.
Meanwhile, Tesla’s energy storage segment recorded a quarterly deployment high of 14.2 gigawatt-hours, a milestone the company attributed in part to its vertically integrated structure. Management said vertical integration enabled Tesla to identify bottlenecks and create tailored, scalable solutions across product lines.
Precious metals and commodity moves
Gold continued its recent ascent, climbing to a record near $5,600 an ounce on Thursday. The rally accelerated after reports that President Trump was considering a new strike on Iran, which heightened demand for safe-haven assets. Silver also reached an all-time high, trading above $119 per ounce, supported by the same safe-haven flows.
Analysts have observed that the gold market's dynamics have shifted beyond traditional crisis- or inflation-driven demand. OCBC analysts commented that gold is increasingly viewed as a neutral store of value that provides diversification across a broader set of macro regimes, a perspective that has helped limit the depth of pullbacks during recent rallies. A softer U.S. dollar and uncertainty around U.S. policy further bolstered metal prices. Copper also hit record highs on Thursday, underscoring broad strength across physical commodity markets.
What to watch next
Market participants will continue to monitor the interplay between central bank messaging, mega-cap technology investment trajectories, and geopolitical developments that can influence safe-haven demand. The Fed’s tone that growth may be firmer than previously assessed, combined with large-scale AI spending by technology companies, frames a market narrative that is at once supportive of equities and attentive to the timing of any future policy shifts.
Investors will also be watching how the heavy AI capital expenditures translate into revenue growth across cloud services and digital platforms, and whether companies can demonstrate a pathway to returns that justifies their elevated spending levels. At the same time, movements in the dollar and escalating geopolitical risks remain potential drivers for continued strength in precious metals and other safe-haven assets.
Key takeaways
- The Federal Reserve held rates at 3.5% to 3.75% and emphasized economic resilience while two governors favored a quarter-point cut.
- Major technology companies are escalating AI investments, with Meta projecting capex as high as $135 billion this year and Microsoft also increasing AI-related spending.
- Gold and silver hit record highs amid geopolitical tensions and a weaker dollar, while Tesla is expanding its AI footprint through a $2 billion investment in xAI alongside mixed automotive revenue trends.
This article summarizes market reactions to central bank policy and corporate earnings, and highlights the sectors most directly affected: technology, automotive, energy storage, and commodities.