Stock Market Charlie's Before the Bell Report 2-18-2025

U.S. stock index futures decided to do a happy dance on Tuesday, as investors eagerly awaited the Federal Reserve’s latest tea leaves reading after Treasury yields took a little tumble the day before. Meanwhile, everyone was on the edge of their seats for any juicy gossip about tariffs.

The Fed’s January meeting minutes, where they decided to keep interest rates as steady as a tightrope walker at 4.25% to 4.5%, are set to drop on Wednesday. Get your popcorn ready!

While the U.S. was busy celebrating Presidents’ Day with a day off, Fed Governor Christopher Waller was busy saying that President Donald Trump’s new tariffs would barely make a dent in prices. Talk about a party pooper!

Philadelphia Fed President Patrick Harker chimed in to say, "Hey, no rush on changing those interest rates, folks!"

Fed Chair Jerome Powell, in his best hawkish impression during his semi-annual Congress chat, along with some spicy consumer and producer price data, has everyone scratching their heads about the Fed’s rate-cut plans for this year.

According to LSEG data, traders are betting on at least one rate cut the size of a quarter, with a 58% chance of another one by December. Place your bets, folks!

"The Fed still thinks its monetary policy is as tight as a pair of skinny jeans, so we’re looking forward to some loosening up in the latter half of 2025 as inflation takes a chill pill," quipped Mark Haefele, the big cheese at UBS Global Wealth Management, in a note.

Friday’s retail sales numbers were as disappointing as a soggy sandwich, causing Treasury yields to dip and likely keeping the U.S. central bank on the path to cheaper borrowing costs this year.

Wall Street’s main stock indexes managed to squeeze out some gains last week, despite global markets acting like a rollercoaster, thanks to Trump’s tariffs on steel and aluminum imports and his plans for more tit-for-tat tariffs.

The S&P 500 is just a smidge, about 0.2%, below its all-time high, which it hit about four weeks ago, as of Friday’s close. So close, yet so far!

Meanwhile, global risk appetite got a boost from whispers of a peace deal between Russia and Ukraine, following some serious chit-chat between Russian and U.S. officials in Saudi Arabia on Tuesday.

At the crack of dawn, 05:01 a.m. ET, Dow E-minis were up by a whopping 10 points (0.02%), S&P 500 E-minis climbed 15 points (0.24%), and Nasdaq 100 E-minis jumped 76.25 points (0.34%).

This week, the earnings season is taking a bit of a breather, with over 380 of the S&P 500 companies having already spilled the beans on their quarterly results.

Retail behemoth Walmart’s earnings, which are like the crystal ball for the American consumer’s health, are expected later this week. Fingers crossed!

S&P 500 companies are on track to show off a year-over-year earnings growth of 15.3%, a nice upgrade from the less-than-10% forecast at the start of 2025, according to LSEG data.

Most of the megacap and growth stocks strutted their stuff in premarket trading, with Tesla leading the parade with a 1% boost.

Intel (INTC) jumped 5.2% after a weekend report hinted that competitors Taiwan Semiconductor Manufacturing Co (TSM) and Broadcom (AVGO) were eyeing potential deals to split the chipmaking giant in two. Drama alert!

Constellation Brands (STZ) rocketed 9.3% after Warren Buffett’s Berkshire Hathaway (BRK/A) decided to pour some cash into the alcoholic beverage maker on Friday. Cheers to that!