The S&P 500 edged up 0.1% on Wednesday as technology stocks trimmed earlier losses, aided by the stabilization of Treasury yields. This came after the Federal Reserve’s December meeting minutes signaled a more cautious approach to rate cuts in 2025.

Key Highlights
1. Federal Reserve Minutes: Slower Rate Cuts Expected

Policymakers indicated they would likely slow the pace of rate cuts due to concerns over stalling disinflation.
Despite a December rate reduction, the Fed emphasized the need for cautious adjustments as inflationary pressures remain.
Treasury yields steadied following remarks by Fed Governor Christopher Waller, who supported continued rate cuts amid expectations of further disinflation.

2. Mixed Performance in Technology

Tech stocks, which are sensitive to interest rate movements, closed above session lows:

Apple (AAPL), Alphabet (GOOG), and Meta (META) traded in the red but improved from earlier losses.
NVIDIA (NVDA) hovered near the flatline, showcasing resilience amid broader sector pressure.

Palantir (PLTR) continued its decline, falling further as concerns over elevated valuations persist. The stock has dropped 16% since peaking last month.

3. Market Close Snapshot

Dow Jones Industrial Average: +94 points (+0.2%)
S&P 500: +0.1%
NASDAQ Composite: -0.1%

Implications for Investors

Tech Sector Outlook

Stabilizing yields provided some relief for tech, but caution remains amid signals of slower rate cuts.
Megacap tech firms like Apple and Nvidia remain pivotal for the broader market’s direction.

Rising Rates and Value Stocks

As Treasury yields stabilize, investors might consider diversifying into value sectors like utilities, which RBC recently upgraded to Overweight.

Fed Policy and Inflation Trends

Continued focus on inflation data will shape expectations for monetary policy. Tracking sector valuations can be enhanced using resources like the Sector P/E Ratio API.

Looking Ahead
Market sentiment is likely to remain tethered to inflation and rate-cut trajectories.