Markets welcomed new Fed Chair Kevin Warsh by sending the S&P 500 (IVV) down by 1.2%. This is the worst performance for “Fed Day” at levels not seen since 1994. That title, however, is an exaggeration. Stock markets staged a relief rally on Monday and Tuesday after the U.S. government reportedly signed a Memorandum of Understanding for peace with Iran.
Nasdaq (QQQ) jumped from below $700 to around $740. Profit-taking ensued on Tuesday, while selling intensified yesterday. Stock markets priced in the Federal Reserve’s bias to hike interest rates next. Even though the increase is potentially not until 2027, fearful investors sold the Magnificent 7 names.
Microsoft (MSFT) was among those that declined, falling by 3.79%. The stock failed to hold a $400.00 rally point. Amazon (AMZN) fell by ~ 3.5%. Meta Platforms (META) fell by even more, losing 5.44%. After the market closed, Meta reportedly lost Emily Dalton Smith. The executive led the company’s restructuring around AI agents.
SpaceX (SPCX) closed the day down by 4.95%. Its $2.53 trillion market cap is impressive but might not last. Investors are better off holding Broadcom (AVGO) or Micron Technology (MU) instead. Those firms report profits and strong quarterly growth rates.
Your Takeaway
Markets are too early in judging Warsh’s competencies. When he leads the Central Bank through the next crisis, be it about inflation or private credit, only then will markets become familiar with his strengths and weaknesses.
