The S&P 500 Index posted its worst session in 10 days on Monday, after buzz around Chinese artificial intelligence startup DeepSeek raised questions about US dominance in artificial intelligence and the rich valuations of Big Tech behemoths like Nvidia Corp. At the same time, the central bank is wrestling with the start of President Donald Trump’s new administration, which came with a flurry of executive orders and the beginning of his promised immigration crackdown, while the threat of sweeping tariffs on US trade partners lingers in the background.
As the Federal Reserve’s two-day meeting begins, investors have accepted that the central bank probably won’t be cutting interest rates this time. But with the stock market at a tenuous point, what they’re looking for is any signal from Chairman Jerome Powell on which way inflation is going.
“Powell’s tone on inflation is crucial for Wall Street because traders need to hear that price pressures are continuing to ease,” said John Belton, a portfolio manager at Gabelli Funds. “There are clearly potential black swans out there.”
