Stocks plunge as Nvidia tanks before GTC event - Nasdaq in trouble!

With recent turbulence in the markets causing the S&P 500 and Nasdaq to be in correction territory, all eyes are now on this week’s Federal Reserve policy decision, which could be a make or break moment for a potential recovery. The Federal Reserve is expected to keep interest rates unchanged, given the ongoing uncertainties surrounding tariffs and concerns about economic growth. However, what investors are really anxious about this week is the release of the Fed’s quarterly forecasts, known as the Summary of Economic Projections (SEP), along with Fed Chair Jerome Powell’s post-decision press conference.

Here are some crucial points to consider as the market anticipates the Federal Reserve’s decision this week:

Julian Emanuel from Evercore ISI highlights the importance of Powell’s post-FOMC remarks to reassure the market about the health of economic growth and the trajectory of inflation. Confidence among investors is wavering due to concerns around stagflation or even recession fears.
Stagflation, a scenario where economic growth stagnates, inflation persists, and unemployment increases, has emerged as a hot topic in financial markets. Investors are grappling with changing trade policies and other uncertainties, such as Elon Musk’s recent efforts to streamline government jobs through the Department of Government Efficiency (DOGE).
According to Bank of America’s Global Fund Manager Survey, a significant 71% of surveyed investors expect stagflation, the highest level since November 2023. This reflects the growing unease in the market about the current economic landscape.

As the market awaits the Federal Reserve’s decision, Powell will need to address the following:

Affirming that despite weak “soft” data, the “hard” data still supports growth.
Ensuring that inflation remains on track to reach the 2% target, despite potential obstacles in the near future.

The Federal Reserve’s policy decision and Powell’s subsequent communication will be critical in shaping market sentiment and guiding investor expectations in the weeks ahead. Stay tuned for further developments as we navigate through this period of uncertainty.