Fed Stays Put, But the Market Isn’t Standing Still

A dovish pause, tech earnings surprises, and oil volatility shaped a wild week on Wall Street

It was a loaded week for markets as traders digested a fresh batch of earnings, a closely watched Fed meeting, and renewed tensions in the energy sector. Here’s what moved the needle:

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📉 Stocks Struggled to Find Direction

• The S&P 500 ended the week flat, recovering from a mid-week dip after the Fed’s decision to hold interest rates steady.
• The Nasdaq posted modest gains, bolstered by strong tech earnings, while the Dow Jones slipped slightly on weakness in industrials and consumer staples.
• Market volatility remained elevated, with investors unsure whether the Fed’s pause is truly the peak of the cycle.

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🏦 Fed Holds, but Signals Patience

The Federal Reserve held the federal funds rate at 4.25%–4.50% for the third straight meeting.
Chair Powell offered a mixed tone:

• “Not confident enough” to cut, but also “unlikely to hike again.”
• Market participants interpreted it as dovish, pushing Treasury yields down midweek, with the 10-year falling below 4.50% temporarily.

Despite recent inflation data surprising to the upside, the Fed remains focused on gradual disinflation and avoiding a hard landing.

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📊 Earnings Recap: Mixed Bag with Bright Spots

This week featured heavy hitters in tech, energy, and consumer goods reporting:

• 🟢 Apple (AAPL): Beat on earnings and announced a $110 billion stock buyback, the largest in U.S. history. Shares popped over 5%.
• 🟡 Amazon (AMZN): Strong cloud performance offset weaker retail margins. Stock ended slightly higher.
• 🔴 Starbucks (SBUX): Missed estimates as international growth slowed and U.S. traffic dropped. Shares fell 9% in a single session.
• 🛢️ Exxon (XOM) and Chevron (CVX) reported weaker-than-expected profits due to lower refining margins, dragging energy stocks lower.

With over 80% of S&P companies now reported, earnings growth is tracking +3.7% YoY, better than expected heading into the season.

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🛢️ Oil Swings as Geopolitical Risk Rises Again

• WTI crude surged past $83/barrel midweek before reversing.
• Fears over supply disruptions in the Middle East and new Russia sanctions briefly jolted prices.
• However, a stronger dollar and softening global demand kept gains in check.

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📈 Economic Data Recap

• JOLTS job openings came in lower than expected, hinting at softening labor demand.
• ISM Manufacturing slipped into contraction again, fueling recession concerns.
• Friday’s Nonfarm Payrolls report showed just 175,000 jobs added, below forecasts, easing inflation fears and pushing rate-cut odds higher for September.

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🧠 Market Mood: Neutral with a Cautious Tilt

As of May 2, 2025, Glideslope AI’s Market Mood Index registers at -25, indicating a mildly pessimistic sentiment. This suggests that while investors aren’t in full retreat, there’s a noticeable shift towards caution.

Key Drivers Influencing Sentiment:

• Geopolitical Tensions: Ongoing global events continue to inject volatility into the markets, prompting investors to reassess risk exposures.
• Mixed Economic Signals: Recent data presents a conflicting picture. While some indicators point to economic resilience, others raise concerns about potential slowdowns.
• Earnings Season Surprises: Corporate earnings reports have been a mixed bag, with some companies exceeding expectations and others falling short, adding to market uncertainty.

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🔍 Looking Ahead: What to Watch Next Week

• CPI and PPI inflation data (Wednesday & Thursday) will shape the rate-cut narrative.
• Earnings from Disney, Uber, and Airbnb could provide more clues on consumer resilience.
• Fed speakers will fan out—expect every word to be parsed for clues on the next policy move.

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Bottom Line:
Markets are in wait-and-see mode. The Fed isn’t easing yet, but it’s also not tightening further. With earnings still coming in and inflation reports ahead, expect more turbulence—but also opportunity—for sharp investors.