The Closing Bell
Wall Street split the difference today, with megacap tech pushing the Nasdaq toward record territory while the broader market absorbed a fresh round of Fed hawkishness and a sector rotation that hammered financials and legacy software.
The Fed stays firm on inflation, even as growth holds up.
Richmond Fed President Barkin spent the session reinforcing last week's rate hike, telling markets the central bank raised rates because inflation risk outweighs employment risk, and that core PCE is running above 3% well beyond energy and tariff categories. He flagged pricing power still intact across much of corporate America and said the Fed can't assume markets will keep rates where they need to be to cool prices. Treasuries (TLT) barely budged and the dollar (UUP) held flat, but the message landed: no dovish pivot coming. Oil (USO) extended its slide, down another 2.8% and into a fifth straight losing session, pressured by Trump's renewed diesel-export comments and signs of progress in Ukraine-Russia diplomacy after Zelenskiy detailed talks with Trump on Patriot missiles and an energy ceasefire.
Meta's Muse reshuffles the AI trade.
The real driver of today's tape was Meta's (META) new agentic AI assistant, Muse, which struck deals with Expedia and PayPal to handle bookings and merchant payments. The news triggered a visible rotation: enterprise software names including Intuit (INTU), down nearly 4%, Adobe, DocuSign and Team slid on fears of disruption, while Paymentus dropped on competitive worries. Financials broadly softened too, with JPMorgan (JPM) slipping as traders shifted capital toward tech. On the other side, Innodata jumped after a Hunterbrook report tied it to Muse's build-out. Layered on top, Apple's (AAPL) pitch that its new Macs carry "no cost per token" versus Nvidia's (NVDA) AI economics, and a fresh wave of enthusiasm around Micron (MU), up 5% on chip-cycle optimism, kept the Nasdaq 100 within reach of record highs. The result: QQQ outperformed while SPY finished essentially flat, a clean signal that this was a tech story, not a broad-market one.
Earnings and single-name action.
AutoZone (AZO) and Thor Industries (THO) both beat Q4 expectations, with Thor's restructuring commentary reassuring investors even as its CEO admitted the RV recovery "never arrived." Valvoline rallied in sympathy. Compass Therapeutics cratered 33% after the FDA pushed for survival-trial data on its cancer drug. Royal Caribbean fell on reports it's nearing a deal to buy a majority stake in Sandals Resorts valued above $6 billion. Copper miners gained on tight Chinese physical markets, and apparel names rose after On Holding reaffirmed guidance.
After the bell and tomorrow.
KB Home, MillerKnoll and Worthington Enterprises report after the close tonight, setting up early tape-setters for Wednesday. Watch Micron's actual print later this week for confirmation of the chip optimism already priced in today.
Bottom line: the Fed is holding the line on inflation while Wall Street keeps chasing the AI trade, and today's rotation shows just how much of this market's strength is concentrated in a handful of tech names.