US stock futures are in green on Wednesday with S&P 500 futures scaling record levels. S&P 500 closed at 6,950.23 on Tuesday and is inches away from breaching the 7,000 mark. With a heavy slate of earnings from major technology firms expected in the days ahead, the up move in the index is likely to continue.
After the close on Wednesday, earnings are due from Tesla, Microsoft, and Meta Platforms, followed by Apple on Thursday, setting the tone for broader market sentiment.
UnitedHealth, plunged 19.6% after issuing a profit warning linked to proposed Medicare Advantage reimbursement changes. Boeing also declined 1.6% after posting underwhelming results.
In August 2025, it was revealed that billionaire Warren Buffett’s Berkshire Hathaway had bought 5 million shares of UnitedHealth, sending the stock price higher. Currently trading at $285, the price appears to have returned to the level where Buffett initially invested.
All eyes are on U.S. Federal Reserve Chair Jerome Powell as Fed officials gather for the Federal Open Market Committee’s two-day meeting amid mixed signals from the economy. Federal Reserve officials are meeting over two days, January 27 and 28, to decide on the monetary policy.
With inflation still above target and the job market showing signs of strain, markets are less focused on the policy outcome and more on Powell’s messaging.
Powell’s press conference is expected to set the tone for expectations on the Fed’s next move. Interestingly, political pressure is mounting on Powell as he is set to retire mid-2026.
After three consecutive rate cuts of a quarter percentage point aimed at reducing a slowdown in the job market and avoiding a rise in unemployment, the Federal Open Market Committee (FOMC) is likely to keep the federal funds rate unchanged at 3.5% to 3.75%.
Federal government offices in Washington, D.C., were closed Tuesday, January 27, due to inclement weather. However, the Federal Reserve Board has issued all releases as scheduled, including statistical publications.
The Federal Open Market Committee will meet as planned on Tuesday, January 27 and Wednesday, January 28. The FOMC statement will be released as scheduled at 2 p.m. EST, and the Chair’s news conference will start at 2:30 p.m. EST on January 28.
Mixed Signals
US Fed is still being challenged on two fronts – inflation and unemployment. Inflation remains untamed while unemployment remains edgy, with the job market sending mixed signals. The US economy is throwing up mixed signals related to inflation, jobs and economic growth. Recent estimates suggest a massive 5.4% GDP growth rate for Q4, but at the same time, the job market is slowing down. Meanwhile, inflation is stuck at around 3%, which is higher than what the central bank wants to see.
Powell’s Press Conference
The markets, analysts, and economists anticipate that the US Fed will maintain its interest rates, making Powell’s press conference after the rate decision crucial for market reactions.
“At the press conference, Powell could be asked for forward guidance on the timing and the requirements for the next rate cut. Shortly after completing a series of insurance cuts, he may have difficulty shedding light on the timing, probably resorting to the “meeting-by-meeting” and “data-dependent” default,” reads a report by Rabobank.
Since the last Fed meeting, tensions between Powell and President Trump have escalated. Trump has publicly and repeatedly said the Fed should sharply lower interest rates and voiced his concern that Powell has been ‘slow’ in cutting rates.
Powell is scheduled to retire as Fed chair in May 2026 but will remain on the board till 2028. In a January 21 interview with CNBC in Davos, Trump threatened Powell that if he decided to remain governor until 2028, his life would be miserable.
Meanwhile, the Department of Justice launched a criminal investigation into allegations that Powell lied to Congress regarding the costs associated with the renovation of the Federal Reserve headquarters during his testimony last year.
In a statement, Powell said the investigation is “a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the president.” Powell is likely to face questions about the investigation during his press conference following the meeting.
The search for the next US Fed chair continues, with Trump yet to announce a successor. Trump intends to replace Powell as chair of the Fed, with potential nominees including economic adviser Kevin Hassett and former Fed president Kevin Warsh, although betting markets suggest BlackRock Executive Rick Rieder is the current front-runner. According to Polymarket, Rick Rieder has 49% chances of becoming the next US Fed chair.
Outlook
According to the December median rate predictions, the FOMC plans to lower rates by 25 basis points in 2026 and again in 2027. It is how the job market numbers stand in the months ahead that will finally decide what path FOMC members take. The first FOMC under the new chairman is scheduled for June. How the monetary policy plays out at that time, and how much the Fed officials are influenced by the White House, remains to be seen.