Fed Keeps Rates Unchanged at 4.25-4.50%; Market Closes Higher

Wednesday, May 7, 2025

Markets closed in the green today, not far off as of the closing bell where the major indexes were at the opening bell. Which is somewhat ironic, as markets went on a roller-coaster ride of volatility during Fed Chair Jerome Powell’s press conference following the latest Federal Open Market Committee (FOMC) meeting. The Dow grew +284 points today, +0.70%. The S&P 500 and Nasdaq reached +0.43% and +0.27%, respectively. And the small-cap Russell 2000 gained +0.33%.
 

Fed Keeps Interest Rate Levels Steady

The Fed, as expected, kept interest rates between 4.25-4.50% today — the third straight session without making a move. It was a unanimous vote among all members, who said in the press release that both aspects of its dual mandate — lower inflation and full employment — have seen their risks increase.

In Powell’s presser afterwards, the Fed Chair was unwilling to step out on any limbs; while inflation is still running slightly higher than ideal levels and the labor force remains near maximum employment, there was no hard data Powell could point to to substantiate any policy changes at this point. He did mention having concerns over current trade policy, but without knowing when or if new trade deals start happening — and to what extent they do — all he could really say is that there is a “great deal of uncertainty.”

Nor would the Fed Chair determine for reporters which side of its dual mandate might need to be addressed first. He couldn’t say how high unemployment levels must go to warrant a move on rates. Powell mentioned that, while concerns about global trade tariffs are high, the “shock” of tariff policy hasn’t hit yet. “People feel stress,” he said, but economic metrics are still “in solid shape.”

About the only thing Powell was firm about today was that the opinion of the president has no bearing on Fed decisions. This is also not the meeting where new SEP with be forthcoming. The Fed will construct new projections for rate move at its June meeting on June 18th. It’s not ruled out that a rate move might be in the works at that June meeting.

Q1 Earnings Roundup: APP, SWKS, CVNA, MELI

Mobile tech platform AppLovin APP crushed Q1 expectations this afternoon, posting earnings of $1.67 per share. This is easily above the $1.45 in the Zacks consensus and a full dollar higher than the $0.67 per share posted in the year-ago quarter. Revenues of $1.48 billion surpassed the $1.38 billion analysts were expecting, and shares rose +18% in after hours, swinging to a positive year to date. The company announced the sale of its mobile gaming business, and has $836 million in free cash flow. (You can see the full Zacks Earnings Calendar here.)

Skyworks Solutions SWKS also beat estimates on its top and bottom lines, albeit less impressively. Earnings of $1.24 per share were 4 cents higher than consensus, while $953 million in fiscal Q2 revenues outperformed the $951.3 million analysts were looking for. The company declared a dividend of 70 cents per share, but shares are still down -4% in late trading, adding to the -24% losses year to date.

Zacks Rank #1 (Strong Buy)-rate Carvana CVNA posted a huge earnings beat — doubling expectations of 75 cents per share to $1.51 — while striding past revenues estimates, $4.23 billion versus $4.04 billion projected. The online used car retailer saw +46% year over year retail unit growth. Shares are trading nearly even with the close after taking an initial tumble on the news.

MercadoLibre MELI shares are up +8% in late trading on its Q1 earnings report after today’s close, where revenues of $5.9 billion swept past the $5.53 billion expected and Gross Merchandise Value (GMV) rose +17% year over year to $13.3 billion. Strength in Argentina has propelled the company in the quarter.

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