US OPEN: Wall Street mixed on upcoming FOMC minutes and Trump-Zelensky tensions

• Wall Street under slight downward pressure at the start of the session
• Investors await FOMC minutes release

Markets in the U.S. opened Wednesday’s cash session with mixed sentiment. Ten minutes after the opening, Wall Street saw the Nasdaq down 0.25% and the S&P 500 down 0.20%. Relatively weak sentiment was visible among smaller-cap companies, with the US2000 index losing 0.7%. The key focus of today’s session in the U.S. could be the release of the FOMC Minutes at 8:00 PM, which are likely to maintain the hawkish tone set by Federal Reserve policymakers regarding monetary policy.

Investors may also pay attention to potential comments regarding talks on the war between Ukraine and Russia. Communication between Trump and Zelensky has deteriorated rapidly after US president accused Ukraine of starting the war, and the sharp exchange of words is weighing on broader markets in Europe.

Volatility Currently Observed on Wall Street. Source: xStation5

US100

The Nasdaq-100 index, represented by the US100 contract, is trading 0.35% higher today compared to yesterday’s close. The index continues to maintain a strong upward trend as long as demand can sustain the 50-day EMA (blue curve) and 100-day EMA (purple curve). These zones have historically served as key support levels for the index.

Source: xStation5

Company news:

• Arista Networks (ANET.US) reported its Q4 2024 earnings after market close yesterday. The company’s revenue came in at $1.93 billion (beating estimates of $1.9 billion), with an operating margin of 47% (2 percentage points above forecasts) and an adjusted EPS of $0.65 (vs. expectations of $0.57). However, despite strong results and reaffirmed 2025 guidance, investor concerns over revenue dependency on Big Tech spending (Meta and Microsoft) overshadowed the report. Arista’s growing reliance on these key clients raises concerns about maintaining growth rates if large tech companies cut capital expenditures.

• Bumble (BMBL.US) shares plunged 20% after weak Q1 guidance disappointed investors. Revenue ($242M-$248M) and adjusted EBITDA ($60M-$63M) fell short of estimates. Despite a Q4 revenue beat, declining ARPU and app revenue pressured sentiment. The company announced it will discontinue Fruitz & Official apps in H1 2025.

• Cadence Design Systems (CDNS.US) shares dropped nearly 9% following disappointing 2025 guidance, despite relatively solid Q4 2024 earnings. Revenue ($5.14B-$5.22B) and EPS forecasts ($6.65-$6.75) missed investor expectations. Analysts cited strong backlog growth but considered the outlook conservative.

• Celanese (CE.US) stock plunged 20% after weak Q1 2025 guidance (EPS: $0.25-$0.50 vs. est. $1.63) and persistent demand weakness in key markets such as automotive, paints, and construction. Despite a Q4 earnings beat, analysts remain cautious, citing ongoing challenges and another reset of earnings expectations.

• Etsy (ETSY.US) shares fell 9.5% after reporting weaker-than-expected gross merchandise sales ($3.74B) and revenue ($852.2M). The number of active sellers declined by 10% YoY. However, EPS ($1.03) and EBITDA ($250.6M) exceeded estimates. Mixed results reflect the lack of consensus on the stock’s recommendations, with market uncertainty weighing on sentiment.

• Howard Hughes (HHC.US) stock dropped 8% at the open after confirming it received a revised but previously rejected buyout offer from Pershing Square. The offer hinges on board and committee approval but does not require a shareholder vote. No negotiations have taken place yet, and no deal is assured.

• Nikola Corp. (NKLA.US) filed for bankruptcy, marking the collapse of a once-promising EV industry favorite. The company struggled with poor sales and frequent CEO changes following a fraud scandal. The stock plunged over 50% at the open.

• Super Micro Computer (SMCI.US) shares surged 7.8% after strong earnings reassured investors, despite a delayed filing and an ambitious $40B revenue target for 2026. The stock's rally reflects optimism about avoiding Nasdaq delisting ahead of the Feb. 25 deadline, despite past short-seller allegations and governance concerns.

• Supernus Pharmaceuticals (SUPN) stock fell 15% after its depression drug SPN-820 failed a Phase 2b trial.