• Magnificent 3 post mixed earnings; DeepSeek elephant in room

• Fed in no rush to act, rate cut not expected until June.

• ECB seen slashing rates by 25bp in January

Big tech earnings season has kicked off with mixed results from Microsoft, Meta and Tesla.

1) Microsoft shares fell over 6% pre-market despite reporting strong quarterly earnings.

Its cloud business missed revenue estimates, disappointing investors – especially after recent events surrounding DeepSeek.

Still, Microsoft CEO assured investors that DeepSeek was good for business – triggering a rebound that recouped all pre-market losses.

2) Meta also published a mixed bag of results, sending its shares whipsawing pre-market.

The tech giant posted quarterly results that beat expectations, but first-quarter revenue projections were slightly weak. However, positive comments by CEO Mark Zuckerberg pushed meta stocks higher.

3) Tesla’s revenue and profit not only missed expectations, but the EV titan also softened projections for 2025 vehicle sales growth.

Despite slipping as much as 6% pre-market prices later rebounded rising over 5%.

Note: Apple reports its fiscal first-quarter earnings on Thursday 30th after US markets close.

DeepSeek remains the elephant in the room and will likely to dominate big tech earnings. If investors remain fearful over DeepSeek threatening US exceptionalism in AI, this could drag tech stocks lower.

Fed in no rush to cut rates

The Federal Reserve left interest rates unchanged as widely expected on Wednesday.

But the biggest takeaway was that officials were not in a rush to cut rates thanks to a strong economy and more time needed to monitor inflation.

Indeed, inflationary pressures could make a return due to possible tariffs and immigration policies implemented by Trump.

Traders are currently pricing in a 53% probability of a 25 bp Fed cut by May with a move fully priced in by June.

FXTM’s USDInd offered a muted reaction to the Fed meeting, with prices trading around 108.00 as of writing.

The outlook for the dollar may be shaped by what actions Trump take on February 1st when 25% tariffs on Canada, and Mexico and 10% tariffs on China. Trump has also threatened to hit the European Union with tariffs, but no date has been confirmed.

ECB expected to cut rates by 25bp

The ECB is expected to cut interest rates by 25 basis points when it meets this afternoon.

Should the central bank signal faster and deeper rate cuts in 2025 due to Trump’s potential tariffs, this could weaken the euro further.

Looking at the charts, the EURUSD is trading below the 50-day SMA as of writing.

Over the past year, the ECB meeting has triggered upside moves of as much as 0.2% or declines of 0.15% in a 6-hour window post-release.

• Sustained weakness below this point could open a path toward the 21-day SMA at 1.0350 and 1.0276 – the lower bound of Bloomberg’s FX model.

• A move back above 1.0434 could see an incline back toward 1.0500.