Stocks closed narrowly mixed yesterday in uneven trade.

All eyes were on the Fed yesterday afternoon.

Stocks mostly treaded water for much of the day before the announcement. And then essentially did the same afterwards.

There were no real surprises. The Fed, as expected, left rates unchanged. And gave no indication when the next rate cut will be. (But based on the CME's FedWatch tool, the odds are not until June (60.7% chance) when the new Fed Chair is expected to replace current Chair Jerome Powell after his term expires in May.)

The key takeaway comments from Mr. Powell yesterday were: 1) The U.S. economy "expanded at a solid pace last year" and is entering 2026 "on a firm footing." 2) Job gains remain low, but the unemployment rate shows signs of "stabilizing." 3) Inflation remains "somewhat elevated." And 4) Many Fed officials believe it's "hard to look at the incoming data and say that policy is significantly restrictive at this time."

All in all, in spite of likely having to wait for a few more months until another rate cut (that is assuming we get one ? although, that was the Fed's forecast in December), they had positive things to say about the economy. And noted that "near-term measures of inflation expectations have declined from last year's peaks," and that "longer-term expectations remain consistent with our 2% inflation goal."

For now, that's probably as good as it's going to get from the Fed.

After the close, we got earnings from 3 of the Magnificent 7 stocks.

Microsoft posted a positive EPS surprise of 6.70%, and a positive sales surprise of 1.30%. That translated to a quarterly EPS growth rate of 28.2% vs. this time last year, and a sales growth of 16.7%. They were up 0.22% in the regular session before earnings, and were down by roughly -7% in after-hours trade following earnings. Concerns over slowing cloud growth and rising CapEx are weighing on shares.

Meta posted a positive EPS surprise of 8.16%, and a positive sales surprise of 2.22%. That equated to a quarterly EPS growth rate of 10.7%, and a sales growth of 23.8%. They were off -0.63% before earnings, and were up more than 7% following earnings. Strong Q1 revenue guidance (6.98% above the consensus), is lifting shares.

And Tesla posted a positive EPS surprise of 8.70%, and a negative sales surprise of -0.94%, for a quarterly EPS growth rate of -31.5%, and a sales growth of -3.15%. They were up 0.13% before earnings, and were trading higher by roughly 2% after. But the tough quarter was not unexpected. Elon Musk, in mid-2025, warned about having "a few rough quarters." In fact, he said Tesla might not see "compelling economics" until late 2026. But investors are energized about the future, namely robotaxis (Cybercab), Musk's AI (xAI) (even though it's not under the Tesla umbrella ? it will factor in their FSD (full self-driving), in-car assistant, and Tesla's data centers), and of course, their Optimus humanoid robots.

Today we'll hear from another 171 companies on deck to report, including another Magnificent 7 stock ? Apple, after the close. We'll also hear from Visa, Caterpillar and Thermo Fisher Scientific before the open.

2 more days left (counting today), until the budget deadline of January 30 hits for funding the government. Otherwise, we could be headed for a full or partial shutdown.

In the meantime, earning season continues. And since stocks typically go up during earnings season, that bodes well for the market.

See you tomorrow,