​EBC Markets Briefing | Wall St regains footing on Fed's rate projection

US stocks bounced on Wednesday after the Fed left its key interest rate unchanged but hinted it would reduce borrowing costs by half a percentage point by the end of the year.

The central bank's new projections showed that officials now expect lower growth and higher inflation. Chair Jerome Powell described the challenges amid the wave of tariffs by the Trump administration.

In the recent market selloff, the valuations of Big Tech have fallen from the lofty heights. Many traders are betting that the declines may well have further to go, and recent history offers evidence to back them up.

While the so called Magnificent Seven hit the lowest level since September last week, valuations were still far from the lows reached in 2018 and 2022 when the profits of tech giants were under pressure.

Wall Street analysts have revised down their forecast for 2025 earnings growth of the group to 22%.

Within the companies, Tesla has the narrowest profit margins and highest valuation and hence greater vulnerability.

Trump and other officials made it clear that they are comfortable with stock market losses so investors retreated from risk assets and taken profits on their holdings of US stocks and tech giants in particular.

The Nasdaq 100 has tumbled below 200 EMA, but the risk is skewed towards the upside in the near term. The key resistance lies around 20,250, a break above which may reverse the downtrend.

EBC Wealth Management Expertise Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC Group Corporate News or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.

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