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Fed holds rates; Powell says no rush to cut rates again

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Dollar supported by elevated US yields, policy outlook

uncertain

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Mixed 'Mag 7' earnings from Microsoft ( MSFT ), Meta, Tesla; Apple ( AAPL )

next

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Europe stocks hit record highs

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US crude settled at lowest this year as Trump tariffs loom

By Kevin Buckland and Amanda Cooper

TOKYO/LONDON, Jan 30 (Reuters) - Global shares rose as

investors digested earnings from Microsoft ( MSFT ) and Meta

in the wake of this week's rout in technology stocks,

while the dollar was steady against most other currencies after

the Federal Reserve left rates unchanged.

The exception was the yen, which strengthened across the

board, as expectations mount for the Bank of Japan to keep

raising interest rates while others cut theirs.

The U.S. central bank, meanwhile, held rates steady

overnight as widely expected, with Fed Chair Jerome Powell

saying there would be no rush to cut them again.

President Donald Trump's policies remain a risk for the

Fed's policy outlook, and Saturday is likely to see new tariffs

slapped on Canada, Mexico and possibly China.

"Powell was unwilling to be drawn on the potential economic

impact and monetary policy response to tariffs, immigration and

regulatory change, but clearly the tails of the risk

distribution related to these factors are long and heavy," said

Elliot Clark, head of international economics at Westpac.

"Powell made clear in the press conference though that,

while strong, the economy is not overheated."

On Wall Street, after-the-bell earnings reports from members

of the Magnificent Seven megacap tech stocks were a mixed bag.

Microsoft ( MSFT ) beat quarterly revenue estimates, while

Tesla's fourth-quarter profit margin missed

expectations. Meta forecast first-quarter revenue below

market estimates. Apple ( AAPL ) reports results later Thursday.

Microsoft ( MSFT ) shares fell 3.7% in premarket trading, while those

in Meta and Tesla rose 3.1% and 3.5%, respectively.

The results did little to further the debate on Chinese

startup DeepSeek's potential threat to U.S. dominance in

artificial intelligence, and the big spending behind it -

questions that triggered a rout in global tech stocks on Monday.

"Microsoft ( MSFT ), Tesla, and Meta are all making massive AI

investments, but investors are now demanding real results,"

Jacob Falconcrone, Saxo chief investment strategist for Europe,

said.

U.S. stock indexes ended slightly lower on Wednesday, and

tech was the biggest drag on the S&P 500, as

the benchmark slipped 0.5%.

Stock index futures pointed to a brighter start later on, up

0.5-0.8% .

In Europe, the STOXX 600 hit a new record high,

rising 0.5%, in a heavy earnings day.

Some of the big names reporting results included lenders

Deutsche Bank, BBVA and CaixaBank

reported results, along with energy producer Shell and

retailer H&M.

In the foreign exchange market, the dollar held steady

against most other major currencies, with the euro

down 0.1% at $1.0407 ahead of the European Central Bank's policy

decision later on. Traders are banking on a quarter-point rate

cut, and will be looking for an indication from ECB President

Christine Lagarde that the market is correctly pricing in around

three more rate cuts this year.

Sterling was flat at $1.2440.

The yen, however, strengthened about 0.5% to 154.44 per

dollar with Bank of Japan Deputy Governor Ryozo Himino

saying in a speech that the central bank will continue to raise

interest rates if the economy and prices move in line with its

forecasts.

Traders currently expect one more quarter-point increase

this year, potentially as soon as July.

Oil prices fell, as traders remained nervous about this

weekend's deadline of Feb 1, by which Trump has said he will

impose tariffs on Canada and Mexico, the two largest suppliers

of crude to the United States.

U.S. crude futures was down 0.3% at $72.38 a barrel,

while Brent crude futures eased 0.34% to $76.32.