Traders are betting for a rate cut — but a hike could be on the table

Most U.S. Federal Reserve officials agreed to hold interest rates at its January meeting — but were divided on monetary policy path going forward, according to meeting minutes released Wednesday. Some thought supporting the labor market should be prioritized over controlling inflation. That is to say, there were disagreements over whether rates should be kept steady or even hiked if inflation doesn’t go down.

Traders think there’s a roughly 50% of the Fed cutting rates in June, according to the CME FedWatch tool. Perhaps they should start considering the possibility of higher interest rates, too.

In the markets, major U.S. indexes rose Wednesday, supported by tech stocks. Nvidia shares rose after Meta Platforms announced Tuesday a deal that will see it using the chipmaker’s next-generation systems. Amazon climbed 1.8% and snapped a nine-day losing streak that cost it over $450 billion in market cap.

Oil prices jumped more than 4% after U.S. Vice President JD Vance said Iran is “not yet willing” to acknowledge certain “red lines” demanded by Washington. In light of this, the U.S. is not taking military force off the table, Vance added.

Meanwhile, India is hosting the AI Impact Summit, which will be attended by business leaders such as OpenAI CEO Sam Altman and Alphabet CEO Sundar Pichai.

Some highlights from the event include Adani planning to invest $100 billion in AI data centers in India and Mistral AI CEO Arthur Mensch saying more than 50% of enterprise software could be supplanted by AI. While Nvidia CEO Jensen Huang pulled out of the event at the last minute, the company announced on Wednesday a partnership with venture capital firms in India to fund AI startups.

Last, catch the Reserve Bank of New Zealand Governor Anna Breman in an exclusive interview with CNBC’s “Squawk Box Asia,” where she’ll be discussing the country’s inflation forecasts and whether the central bank could hike rates — just as some Fed officials seem inclined to.

— CNBC’s Jeff Cox, Sean Conlon and Pia Singh contributed to this report.

Nvidia sells entire stake in Arm, according to the chip giant’s filing to the SEC on Tuesday. Nvidia had held shares in Arm since 2023, but wound down the size of its stake toward the end of 2024, according to past documents filed with the SEC.

U.S. tech companies should “worry a little bit” about the subsidies their Chinese competitors receive from their government in the AI race, Microsoft President Brad Smith told CNBC, even as America has an advantage in terms of chip power.

Figma reports third-quarter earnings and quarterly guidance that beat Wall Street expectations. Figma’s revenue grew 40% year over year in the fourth quarter, according to a statement. Shares jumped more than 15% in extended trading.

Major U.S. indexes rose Wednesday as tech names boosted markets. The pan-European Stoxx 600 rose 1.2%. German life sciences company Bayer fell 7.2% after it proposed a $7.25 billion settlement in a lawsuit regarding its weed killer Roundup.

[PRO] JPMorgan prefers international stocks over U.S. ones, equity strategists from the bank wrote in a Monday note. These are the regions and sectors that the bank expects outperformance from.

Why India joining this U.S.-led tech alliance could help supply chains

India is joining the U.S.-led Pax Silica initiative, giving Washington its biggest win yet in the race to shape and influence who has access to advanced semiconductors and AI infrastructure supply chains. 

Pax Silica is the Trump administration’s effort aimed at securing the global supply chain for silicon-based technologies.

India’s participation, which will be formalized Thursday at the India AI Impact Summit in New Delhi, brings one of the world’s largest technology markets, and a member of the BRICS alliance, into Pax Silica at a moment when competition over AI hardware is intensifying across geopolitical blocs.

— Dan Murphy