Futu Morning Report: Fed Holds Rates, Trump Threatens Iran, Meta Surges After Earnings.

Trump: A Large Fleet Heading to Iran

On January 28, President Trump announced on social media that a large fleet is heading to Iran, ready to fulfill its mission swiftly. He expressed hope that Iran would come to the negotiating table quickly.

Iran's Response

Iran's Foreign Minister, Amir-Abdollahian, responded to Trump's threats, stating that Iran's armed forces are on high alert and will respond decisively to any aggression against its territory, airspace, or waters. He emphasized that Iran has learned from past conflicts and is prepared to react with greater strength and speed. Iran welcomes a fair nuclear agreement based on mutual interests, but insists that negotiations must be conducted on equal terms without coercion.

Federal Reserve Holds Rates Steady

The Federal Reserve announced it will maintain the federal funds rate target range at 3.5% to 3.75%, aligning with market expectations. This follows three consecutive rate cuts in previous meetings. Fed governors Milan and Waller opposed the decision, advocating for a 25 basis point cut.

Powell on Inflation

Fed Chair Powell indicated that much of the unexpected inflation is due to tariffs rather than demand. He noted that core PCE inflation is slightly above 2% when excluding tariff impacts. The Fed's focus is shifting from unemployment to inflation, with a low probability of rate cuts in the near term.

Market Reactions Post-Fed Decision

According to CME FedWatch, the probability of a 25 basis point cut by March is 11.9%, while the likelihood of maintaining rates is 88.1%. Analysts noted a hawkish tone from the Fed, with inflation becoming the primary concern.

Ongoing Investigation into Powell

A source revealed that the Federal Reserve has not complied with a grand jury subpoena as part of a criminal investigation into Powell. The investigation is ongoing, and it remains unclear when the requested documents will be submitted.

Trump Reluctant to Nominate Hassett for Fed Chair

President Trump expressed hesitance in nominating NEC Director Hassett for the Fed Chair position, stating he does not want to lose him. Hassett has been viewed as a frontrunner for the role but Trump is also considering other candidates.

U.S. Treasury Secretary on Strong Dollar Policy

Treasury Secretary Yellen reiterated the U.S. commitment to a strong dollar policy and stated that the U.S. will not intervene in the yen market. Following her comments, the yen fell sharply against the dollar.

Tether's Gold Accumulation

Tether, a stablecoin issuer, has reportedly become one of the largest private holders of gold, accumulating approximately 140 tons. The company has been buying gold at a rate of 1-2 tons per week.

SpaceX IPO Speculation

Elon Musk hinted that SpaceX may target a June IPO to coincide with a planetary alignment and his 55th birthday. This unconventional timing reflects Musk's tendency to incorporate symbolic significance into business decisions.

Stock Market Overview

On January 28, U.S. stock indices showed mixed results. The Dow Jones rose slightly, while the S&P 500 dipped marginally. Notable tech stocks like Intel and Micron saw significant gains, while others like Meta and Apple experienced slight declines.

Earnings Reports

Tesla

Tesla reported better-than-expected Q4 earnings but experienced a 3% decline in annual revenue, marking its first annual revenue drop.

Microsoft

Microsoft's Q2 earnings exceeded expectations, but concerns over slowing cloud growth led to a significant drop in after-hours trading.

Meta Platforms

Meta's Q4 earnings surpassed estimates, resulting in a more than 7% increase in after-hours trading.

Samsung

Samsung's chip division reported a fivefold increase in profits, driven by AI demand, and announced a $2.5 billion stock buyback.

IBM

IBM's Q4 revenue grew by 12%, leading to a more than 7% increase in after-hours trading.

Other Notable Developments

• BlackRock increased its stake in China Aluminum.
• Qingdao Bank reported a 21.66% increase in net profit for 2025.
• Starbucks showed signs of recovery with a 4% increase in same-store sales.