It has been a whiplash of a week on Wall Street. The Fed held rates steady on Wednesday, but a divided vote sent yields surging — the 30-year now at its highest since 2007. That helped spark the Dow's worst day since April of last year, before futures bounced back this morning. Amazon, Apple, and Coinbase all report after the bell alongside fresh GDP and inflation data. Eric Criscuolo, market strategist at the New York Stock Exchange, joins us to break it all down. Eric, let's start with the Fed — a 9-to-3 vote to hold with three members in favour of a hike. That sent yields to their highest since 2007. What does that split vote tell you?
The split vote was not entirely unexpected — we saw the divergence in the dot plot from the last meeting, with clear differences between those who wanted to hold and those who wanted to hike. Seeing three dissents was not terribly surprising. But the reaction in yields was definitely stark, especially on the long end. The 10-year and 30-year absolutely ripped higher. A lot of that was because the bond market did not get the clarity it was looking for about what comes next and how Warsh and this FOMC are reading things. He said a lot of stuff — but in saying a lot, he perhaps did not say much. There is just a lot of uncertainty right now, and that uncertainty was priced directly into bonds, especially at the long end.
Let's talk about Warsh's communication style, because it is clearly very different from Powell's.
Stark difference. I do not think either is better or worse, but it is definitely different. My thinking going into this meeting was that with all the big structural changes Warsh wants to make — how the Fed looks at data, how it structures itself, how it communicates — why would they move right now in front of all those changes? So the hold was not surprising. But Warsh does not like forward guidance. He wants markets on their toes. He does not want them to know exactly how he is going to react ahead of time. That uncertainty got priced in. It is like everyone is feeling each other out right now. His communication style is something markets are still recalibrating their expectations for.
It is a bit like dating — figuring each other out. The Dow had its worst day since April on that yield spike, but futures are bouncing back this morning. Turnaround or pause before more volatility?
I would not say all clear. We still have a lot of reports to get through. Microsoft was up around 10% in the premarket, Meta was down — both huge AI spenders, but very different business models and very different reactions. Amazon reports tonight. There is definitely a strong rotation out of high-flying names into other areas. AI is still top of mind but the sentiment around the spending is getting more cautious.
This is the second round of US drone strikes since February after the two-week ceasefire collapsed. Are markets still treating the Middle East conflict as contained or does it feel more like a potential spiral?
The market still largely thinks there will be some form of resolution eventually. It has taken a lot longer than the market originally thought, but it is still pricing in a resolution. The S&P is about 5% from all-time highs — it has not collapsed. The dips are still being bought. But it is starting to invite more concern than it was before. The strong rotation we are seeing into financials and healthcare reflects that shift in sentiment.
Amazon, Apple, and Coinbase report after the bell. Which earnings matter most for where the market goes next?
Amazon is the hyperscaler comparison — investors will want to line up what Amazon is doing on AI CapEx against what Microsoft, Meta, and Alphabet have already shown. That comparison is going to drive a lot of discussion. Apple is in its own world when it comes to AI — they are not spending huge amounts on infrastructure. They want AI contained on their devices, tightening their ecosystem further. Very different model. And then Coinbase ties back to the broader digital assets and crypto story. All these names are interrelated, but the way they interact is different. Amazon's CapEx plans tonight are the number I will be watching most closely.
It will definitely be interesting to see what happens after the bell. Eric, thanks so much for joining us.
Appreciate it. Anytime.
