What the Trading Bots Got Wrong About the Fed Minutes
Despite an initial surge, the Dow closed down 167 points after the Federal Reserve released January minutes Wednesday afternoon. William De Lucy, Managing Director at Amplify Trading, was with us to break down why robots may have misunderstood the overall message delivered by the Fed.
He said the initial push higher was because algorithms were looking at the headlines, which were more dovish than the overall statement was meant to be. De Lucy said there are automatic word recognition programs that pick up words such as "gradual", which was connected to the pace of interest rate hikes. He said it seems like the algorithms got it wrong, and the A.I. was not intelligent enough.
Goldman Sachs came out with a report Thursday that revealed it expects 5 rate hikes. De Lucy said no one is expecting just three anymore. He added that one big deterrent for the Fed is that more rate hikes will cause equities to correct. Since President Trump has been putting such a focus on the strong stock market, Du Lucy expects we will see more inflation before we see rates go up.
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Swedish buy now, pay later company Klarna is making its highly anticipated public debut on the New York Stock Exchange Wednesday, the latest in a run of high-profile initial public offerings this year. The offering priced at $40 Tuesday, above the forecasted range of $35 to $37 a share, valuing the company at more than $15 billion. The valuation easily makes Klarna one of the biggest IPOs so far in 2025, which has been one of the busier years for companies going public. Other popular IPOs so far this year include the design software company Figma and Circle Internet Group, which issues the USDC stablecoin..
Oracle co-founder Larry Ellison wrested the title of the world’s richest man from longtime holder Elon Musk early Wednesday as stock in his software giant rocketed more than a third in a stunning few minutes of trading. That is according to wealth tracker Bloomberg. A college dropout, the 81-year-old Ellison is now worth $393 billion, Bloomberg says, several billion more than Musk, who had been the world’s richest for four years. The switch in the ranking came after a blockbuster earnings report from Oracle. Forbes still has Musk as the richest, however, valuing his private businesses much higher.
