Fed Beats Big Tech

By Alex Eule |  Wednesday, July 29

The Fed Matters Most. The day's main event promised to be four of the country's largest tech CEOs appearing in front of Congress to talk about market power and competition issues. But for investors, the hearing was mostly a dud. 

While the CEOs of Apple, Amazon.com, Alphabet, and Facebook were being virtually grilled over Webex, the stocks of all four companies actually moved higher. Investors seemed to recognize that members of the House were mostly interested in making speeches and not all that focused on actual disclosures from the CEOs. The lawmakers repeatedly cut off Tim Cook, Jeff Bezos, Sundar Pichai, and Mark Zuckerberg to maximize their five minutes of question time.  

By the close, Apple stock was up 1.9%. Amazon, Alphabet, and Facebook all finished the day up more than 1%. It's possible the hearing puts to rest some of the regulatory worry that have surrounded tech stocks for the last couple years. "Absent a legislative fix, we don’t see meaningful change in regulation, although future acquisitions will most certainly be scrutinized and more difficult to close," Wedbush analyst Daniel Ives wrote tonight. 

The day's trading was a reminder that one thing matters most to investors these days: the Federal Reserve. And following its latest policy meeting, the Fed indicated it has no plans to change the course of its accommodative monetary policy. Early in his press conference this afternoon, Federal Reserve Chairman Jerome Powell reiterated the key point he's been making for several months now: 

All of us have a role to play in our nation’s response to the pandemic. At the Federal Reserve, we remain committed to using our tools to do what we can, and for as long as it takes, to provide some relief and stability, to ensure that the recovery will be as strong as possible, and to limit lasting damage to the economy.

Stocks ticked higher shortly after 2 p.m., and ended near a session high, up 1.2%. 

Tomorrow promises more tech excitement, with earnings expected from all the same companies that faced Congress today. This time, Wall Street analysts will be asking the questions, and the tech execs can expect a warmer reception.