Wall Street equities remain stable, with the dollar holding steady as investors await upcoming technology earnings and the Federal Reserve meeting.

World markets seemed to chill out on Wednesday after a wild week for stocks, shifting into a wait-and-see mode ahead of the Federal Reserve's first rate meeting of the year and earnings reports from Microsoft, Meta, and Tesla.

Most analysts think the Fed will pause its rate cuts after three meetings, but investors are curious about how it views the first nine days of Donald Trump's return to the presidency.

Before that meeting, there was still a lot happening. European stocks hit a record high, thanks to strong earnings from Dutch chip equipment maker ASML, which saw its shares jump 8% and lifted the tech sector by 3.4%.

In Asia, markets that weren't on Lunar New Year break also saw gains overnight, while Wall Street's main indices were pretty quiet ahead of the earnings from the "Magnificent 7." It seems like investors have brushed off the global sell-off from Monday, when a new low-cost Chinese AI model, DeepSeek, knocked over half a trillion dollars off Nvidia's market cap.

However, more than half of those losses have been recovered, and with the Fed meeting coming up, currency and bond markets were mostly stable.

The 10-year U.S. Treasury yield was at 4.52%, down 3 basis points for the day. European yields also dipped, with expectations that the ECB will cut rates again on Thursday, while the yen edged up to 155.34 per dollar after the Bank of Japan's meeting minutes hinted at more rate hikes.

Michael Metcalfe, State Street's head of global macro strategy, mentioned that after all the recent market chaos, Wednesday was supposed to bring some much-needed stability.

"Today is a day of certainty since we know the Fed won't change rates," he noted.

Despite the buzz around Trump's trade tariffs, State Street anticipates that Fed chair Jerome Powell will stick to the message that rates are likely to keep decreasing, and the return of calm in the stock markets is definitely a good sign.

Metcalfe mentioned that two days in, it seems there's no wider spread of contagion.

BIG TECH EARNINGS

All eyes are on the big tech earnings coming from Meta, Microsoft, and Tesla after the market closes on Wednesday.

"Even though there are still some unanswered questions, the market seems to believe that the innovation from DeepSeek won't significantly affect the AI capital expenditure cycle and might even create a new demand for GPUs," said Chris Weston, a strategist at Pepperstone.

Meta's CEO, Mark Zuckerberg, announced on Friday that the company is looking to invest up to $65 billion this year to boost its AI infrastructure, which is higher than what Wall Street had anticipated. Microsoft's upcoming quarterly revenue forecast will reveal if their massive investments in AI are driving growth.

Tesla investors are eager for more information about the automaker's lower-priced model, as many believe this affordable car could help the company achieve its goal of increasing deliveries by up to 30% this year.

Meanwhile, traders are processing Trump's recent tariff threats. The White House confirmed he still intends to impose hefty tariffs on Mexico and Canada this Saturday and is "very much" considering similar actions against China over the weekend.

The Mexican peso didn't react much, slipping slightly to 20.6 per dollar, while the Canadian dollar weakened a bit to C$1.45. The central bank there is expected to lower rates by another quarter point soon.

Sweden's Riksbank has kicked things off by lowering its main interest rate by a quarter point to 2.25%. This marks the fifth consecutive cut and the sixth since last May. Surprisingly, the crown didn’t seem to react much to this expected change.

On the other hand, the dollar index, which tracks the greenback against a mix of currencies like the yen and euro, saw a 0.24% increase.

In the oil market, prices dipped a bit, with Brent crude futures falling to $76.95 per barrel, continuing a downward trend. Meanwhile, U.S. West Texas Intermediate crude dropped to $73.19 after a similar decline.

In the crypto world, the Czech Republic's central bank Governor Ales Michl shared in an interview with the Financial Times that he plans to propose a bitcoin purchase plan to the bank's board on Thursday. If it gets the green light, the bank could potentially hold up to 5% of its 140 billion-euro ($146.13 billion) reserves in bitcoin.

As for bitcoin, it was trading at $101,991, showing a rise of about 1.60%.