Apple smashes earnings and gold hits new high.

"AI is the new electricity." ✍️ — Andrew Ng  SUMMARY ✅ U.S. software stocks on Thursday slid deeper into an ongoing intense sell-off this year as investors recoiled from the sector on growing fears that artificial intelligence could upend many firms’ business models. ✅ The Federal Reserve held interest rates steady and offered a restrained message from Chair Jerome Powell, reinforcing expectations for an extended pause as markets await clearer signals from inflation and labor data. ✅ Meta shares surged after the company beat fourth-quarter expectations and unveiled plans for up to $135 billion in AI investment, underscoring both its ambition in artificial intelligence and the intensifying competitive pressure it faces. ✅ Apple quietly deepened its AI capabilities by acquiring Israeli startup Q.ai, a move that highlights its strategy of integrating specialized technologies—particularly in audio—through targeted acquisitions. ✅ Tesla announced a record capital spending plan exceeding $20 billion as it pivots decisively away from traditional EVs toward autonomous vehicles, humanoid robots, and AI-driven technologies that underpin its long-term valuation. ✅ American Airlines plans to resume flights to Venezuela for the first time since 2019, signaling a cautious reopening of U.S. air service to the country amid shifting geopolitical and security conditions. MARKET SNAPSHOT ↗ Dow                            49,071.56                       + 0.11% ↘ Nasdaq                       23,685.12                       - 0.72%  ↘ S&P                              6,969.01                       - 0.13%  ECONOMICS Takeaways from the Fed’s Latest Rate Decision and Powell’s Message to Markets Image courtesy of jpmorgan.com The Federal Reserve concluded its two-day policy meeting on Wednesday with few surprises, delivering an outcome that largely matched market expectations and offering little new direction during Chair Jerome Powell’s post-meeting press conference. Here are five key points investors should keep in mind: The decision: As widely anticipated, the Federal Open Market Committee voted to hold its benchmark federal funds rate in a range of 3.5%–3.75%. The decision ended a streak of three consecutive rate cuts and signaled that the central bank may not be inclined to resume easing in the near term. The dissents: Continuing a recent pattern, the vote was not unanimous. Governors Stephen Miran and Christopher Waller dissented, favoring another quarter-point cut. For Miran, the dissent marked a shift from his previous preference for larger, half-point reductions. Powell’s tone: Powell’s press conference offered little in the way of headlines. On multiple occasions, he declined to comment on political controversies surrounding the Fed. When asked what advice he would give his eventual successor, Powell replied simply: “Stay out of elected politics.” The economic outlook: The Fed’s statement and Powell’s remarks pointed to expectations of solid economic growth, a short-term inflation bump tied to tariffs that should fade over time, and a labor market showing little movement. Labor force participation trends and reduced immigration are limiting hiring, while layoffs remain subdued. Market reaction: With no new signals to digest, markets were largely unmoved. Major stock indexes finished little changed, while traders continued to price in roughly a 60% chance of two additional quarter-point rate cuts later this year. What they’re saying “The Fed delivered a rate hold, but it came with a somewhat hawkish tone. The door remains open to further cuts, but Chair Powell has clearly raised the bar. Growth should remain solid, but it will need to be accompanied by stronger job gains. Upcoming labor data could complicate that outlook.” EARNINGS Meta Shares Jump on Q4 Earnings Beat as Company Outlines Up to $135B AI Investment This Year Image courtesy of noyb.eu Meta Platforms (META) reported fourth-quarter earnings on Wednesday that exceeded analysts’ expectations on both revenue and profit, while unveiling plans for a massive increase in AI-related spending. The company said it expects capital expenditures of $115 billion to $135 billion in 2026, sharply higher than the $72.22 billion spent in 2025. Shares of Meta surged as much as 10% following the announcement. For the fourth quarter, Meta posted earnings per share of $8.88 on revenue of $59.9 billion, topping Bloomberg consensus estimates of $8.16 in EPS and $58.4 billion in revenue. Meta’s Reality Labs division generated $955 million in revenue, roughly in line with expectations of $959 million. However, the segment recorded operating losses of $6 billion, slightly wider than the $5.9 billion loss analysts had anticipated. Meta is far from alone in ramping up AI infrastructure spending. Rivals Amazon, Google, and Microsoft are also investing heavily in data centers as competition intensifies across advertising and artificial intelligence. The company has also made high-profile AI investments and hires, including a $14.3 billion deal for a 49% stake in Scale AI and the appointment of its CEO, Alexandr Wang, as Meta’s chief AI officer to lead the company’s Superintelligence Labs. Despite these moves, Meta has faced challenges with its latest AI development efforts, including delays to its Llama 4 Behemoth model. According to CNBC, Meta is also considering making its next major AI model proprietary, potentially moving away from its open-weights approach that allows third-party developers to access and refine its models. More recently, Meta reduced headcount in its metaverse division, with plans to redirect some of the cost savings toward its wearables strategy, including AI-powered smart glasses. Together, these shifts have fueled perceptions that Meta is scrambling to maintain its position in the increasingly competitive AI race. While Meta entered 2025 as an early leader, Google has since moved into the lead with its Gemini 3 model, outpacing rivals including OpenAI. Beyond AI competition, Meta continues to face mounting regulatory pressure. Calls to restrict social media access for users under 16 are growing, with Australia already implementing a ban and France considering similar measures. In the U.S., the Federal Trade Commission recently said it plans to appeal its loss in an antitrust case alleging Meta acquired Instagram and WhatsApp to eliminate competitive threats. AUTOMOTIVE Tesla Plans $20 Billion Capital Spending Spree In Push Beyond Human-Driven Cars Image courtesy of Brandon Bell / Getty Images Tesla said it plans to more than double capital spending to a record level above $20 billion this year, marking a major shift away from its traditional electric vehicle business and toward autonomous driving, humanoid robots, and other emerging technologies. The strategy reflects Tesla’s effort to reposition itself after losing its global EV sales crown to China’s BYD last year. During Wednesday’s earnings call, executives emphasized that future investment will prioritize long-term, high-risk bets such as fully autonomous vehicles and robotics rather than conventional, human-driven cars. Chief Executive Officer Elon Musk underscored the pivot by announcing plans to end production of the Model S sedan and Model X SUV. The space at Tesla’s California factory previously used for those vehicles will be repurposed for manufacturing humanoid robots. “This is going to be a very big capex year,” Musk said. “We’re making big investments for an epic future.” Chief Financial Officer Vaibhav Taneja said most of the record spending will be directed toward production lines for Tesla’s Cybercab—a fully autonomous vehicle without a steering wheel or pedals—the long-delayed Tesla semi-truck, Optimus humanoid robots, and new battery and lithium production facilities. Although Tesla still generates the bulk of its revenue from sales of human-driven EVs, its valuation far exceeds that of traditional automakers. Investors have largely priced the company as a technology platform, betting that Musk can deliver robotaxis and humanoid robots powered by Tesla’s artificial intelligence capabilities. The planned spending is more than double Tesla’s $8.5 billion in capital expenditures last year and significantly above its previous record of $11.3 billion in 2024. Revenue was down 3% year-over-year in the fourth quarter, which some analysts have cited due to a slowdown in EV sales because of the end of federal tax credits. Still, Tesla beat Wall Street targets, posting $24.9 billion in revenue versus $24.8 billion estimates. Tesla also revealed a $2 billion investment in Elon Musk’s xAI. Musk highlighted that Tesla had changed its mission to “build a world of amazing abundance,” from “to accelerate the world’s transition to sustainable energy,” and spoke about how the most likely path of AI was to help all humans obtain “universal high income” and better medical care. The language used on the call, which included mention of a hypothetical rare earth refinery, which “we do desperately need in America” hinted at the time he has spent with President Trump over the last year. ARTIFICIAL INTELLIGENCE Apple Acquires Israeli AI Startup Q.ai Image courtesy of wccftech.com Apple has acquired Israeli artificial intelligence startup Q.ai, the company confirmed Thursday. Financial terms of the deal were not disclosed. Q.ai operated largely under the radar and had not publicly launched a product, though its website suggests the company was focused on AI technology related to audio. The startup was led by CEO Aviad Maizels, who previously founded PrimeSense—an Israeli firm Apple acquired in 2013. “We’re thrilled to acquire the company, with Aviad at the helm, and are even more excited for what’s ahead,” Johny Srouji, Apple’s senior vice president of hardware technologies, told Reuters, which first reported the acquisition. Srouji oversees Apple’s chip development efforts. According to PitchBook, Q.ai was backed by investors including GV (Google Ventures), Kleiner Perkins, and Spark Capital, and was developing what it described as “communication enhancement technology.” Apple has increasingly integrated AI into its audio products, particularly AirPods, which now feature capabilities such as live translation and intelligent noise cancellation that adapts when users are engaged in conversation. The acquisition comes as some investors urge Apple to step up its AI strategy while rivals invest heavily in advanced models and infrastructure. Apple has faced delays in rolling out certain AI features, including a more personalized version of Siri capable of interacting more deeply with apps. Historically, Apple has favored acquiring smaller companies with specialized technologies that can be folded into its ecosystem. Earlier this month, the company also announced a partnership with Google to use Gemini models for select Apple Intelligence features. “We’re very open to M&A that accelerates our roadmap,” Apple CEO Tim Cook said in July. AVIATION American Airlines to Resume Flights to Venezuela, First U.S. Carrier Since 2019 Image courtesy of JOE RAEDLE GETTY IMAGES TNS / MC American Airlines plans to restart service between the United States and Venezuela, marking the first time a U.S. carrier has flown to the country since 2019. The move comes just weeks after the U.S. captured Venezuela’s president and would make American the first U.S. airline to return following years of suspended service. Venezuela has remained largely isolated from U.S. commercial aviation after major carriers pulled out, citing safety concerns and political unrest. American halted flights in March 2019 after its pilots’ union advised members to refuse trips to the country, following a U.S. State Department warning urging American citizens to leave Venezuela and the withdrawal of U.S. diplomats. In a statement Thursday, American said it will share additional details about its return in the coming months and emphasized that it is working closely with federal authorities to obtain the necessary approvals and complete security assessments before resuming service. Delta Air Lines and United Airlines, which suspended flights to Venezuela in 2017, did not immediately comment on whether they plan to follow suit. The announcement comes amid heightened regional tensions. Earlier this month, federal officials temporarily closed portions of Caribbean airspace following U.S. strikes in Venezuela, disrupting air travel and forcing airlines to cancel hundreds of flights near the end of the holiday period. 📉 ON THE MOVE AND NOTABLES 📈 ✔️ The S&P 500 briefly reached 7,000 for the first time on Wednesday before pulling back. ✔️ Treasury Secretary Scott Bessent said this week that the U.S. will not intervene to support the Japanese yen. ✔️ The U.S. dollar index ($DXY) edged lower and remains near four-year lows. ✔️ WTI crude is up to around $66 per barrel after the White House warned Iran to accept a nuclear agreement or risk potential military action, heightening concerns about possible disruptions to Middle East oil supplies. ✔️ Geopolitical tensions are also supporting precious metals, with gold climbing to fresh new highs above $5,500 per ounce and silver jumping more than 6%. ✔️ The U.S. deficit with its global trading partners nearly doubled in November as the shortfall with the European Union swelled. Following a month where the trade deficit hit its lowest level since early 2009, it shot up to $56.8 billion, an increase of 94.6% from October. ✔️ The Federal Open Market Committee (FOMC) concluded its January meeting this week, deciding to maintain the federal funds target range at 3.5%-3.75%. The FOMC statement noted that the unemployment rate shows signs of stabilization, while inflation remains elevated. ✔️ Nvidia (NVDA) gained after reports that China’s government granted several domestic companies approval to purchase Nvidia’s H200 AI chips. ✔️ ASML (ASML) jumped after the semiconductor equipment maker posted better-than-expected quarterly sales and issued strong guidance. ✔️ Insurance platform Ethos Technologies Inc. and some of its shareholders raised roughly $200 million in an initial public offering, becoming the latest in the sector to go public. ✔️ Texas Instruments (TXN) climbed despite earnings per share coming in slightly below consensus and revenue roughly in line with estimates. Investors appeared encouraged by stronger-than-expected guidance for the current quarter. ✔️ Seagate Technology (STX) surged following solid earnings, citing strong demand driven by AI workloads. ✔️ Starbucks (SBUX) rose despite missing analysts’ average estimate for fiscal first-quarter earnings. Same-store sales and transactions increased. Revenue modestly exceeded expectations, supported by 4% growth in U.S. comparable-store sales on strong holiday demand. ✔️ GE Vernova (GEV) fell despite reporting solid earnings and guidance, along with what appeared to be strong new orders. Some investors may have focused on slightly weaker-than-expected EBITDA, Barron’s reported. ✔️ Applied Materials (AMAT) rose after Mizuho upgraded the stock to outperform from neutral. The firm said the semiconductor equipment supplier stands to benefit from accelerating investment in the U.S., Taiwan, and Japan. ✔️ AT&T (T) gained after reporting earnings and revenue that topped analysts’ expectations. ✔️ Bitcoin (/BTC) has been recovering this week but remains well below its January highs. ✔️ Apple Inc. unveiled that its revenue in the first quarter of its fiscal 2026 came in at $143.8 billion, jumping 16% on an annual level and beating analyst estimates. ✔️ Microsoft (MSFT) fell despite reporting results that beat expectations. Earnings per share of $4.14 exceeded the $3.91 consensus, while revenue of $81.27 billion came in nearly $1 billion above estimates. ✔️ ServiceNow (NOW) slid even after beating earnings and revenue estimates and issuing slightly higher guidance. ✔️ Germany-based SAP (SAP) dropped by double digits early despite posting better-than-expected earnings, as cloud-revenue growth fell short of expectations, Barron’s reported. ✔️ IBM (IBM) surged after topping Wall Street estimates on both earnings and revenue. ✔️ Mastercard (MA) advanced after earnings beat estimates, supported by resilient consumer spending. Visa (V) is scheduled to report later today. The Federal Reserve noted yesterday that consumer spending remains solid. ✔️ Southwest Airlines (LUV) climbed after forecasting 2026 profits that exceeded analysts’ expectations. The airline’s most recent quarterly earnings and revenue were largely in line with estimates. ✔️ Whirlpool (WHR) tumbled after missing earnings and revenue expectations and guiding to weaker-than-expected fiscal 2026 earnings. In its release, the company characterized 2025 as a “challenging” year. 💲What Else to Watch💲 🟢 January 30: Expected earnings from Exxon Mobil (XOM), Chevron (CVX), American Express (AXP), and Verizon (VZ). 🟢 February 2: December construction spending, January ISM Manufacturing Index and expected earnings from Walt Disney (DIS), IDEXX Laboratories (IDXX), and Palantir (PLTR). 🟢 February 3: December job openings and labor turnover survey (JOLTS), and expected earnings from Merck (MRK), PepsiCo (PEP), Pfizer (PFE), Eaton (ETN), Advanced Micro Devices (AMD), Amgen (AMGN), and Chubb (CB). 🟢 February 4: ADP January employment change, December factory orders, January ISM Services PMI®, and expected earnings from Eli Lilly (LLY), AbbVie (ABBV), Novartis (NVS), Novo Nordisk (NVO), Uber Technologies (UBER), Alphabet (GOOGL), Qualcomm (QCOM), and Arm Holdings (ARM). 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