Market Wrap | Federal Reserve Eases Bank Rules Amid Inflation Concerns Nvidia Surges on AI Dominance

June 25, 2025: The Federal Reserve's proposal to ease key capital requirements for large banks is a significant macroeconomic development, potentially influencing banking stability and liquidity, which could affect investor sentiment. Meanwhile, Fed Chair Powell's comments on fiscal policy driving inflation highlight ongoing concerns about inflationary pressures, crucial for market participants. On the market front, the S&P 500 index remained unchanged, the Dow Jones Industrial Average fell by 0.25%, and the Nasdaq Composite rose by 0.31%.

The market saw a mixed performance across various sectors. The Utilities, Energy, Communication Services, Materials, Industrials, Real Estate, Financials, and Consumer Staples sectors underperformed the S&P 500. Conversely, the Technology and Healthcare sectors bucked the trend and posted gains.

Nvidia shares rose 4.33% today, solidifying its position as the undisputed leader in performance as the AI market accelerates. The company's strong performance reflects its dominance in the AI sector, where its advanced technologies are driving innovation and growth.

Urgent.ly shares surged over 82%, positioning itself at the lower end of a broad horizontal trend, presenting a favorable buying opportunity. Vor Biopharma climbed nearly 75% after securing $175 million in private placement financing to advance its clinical pipeline and corporate initiatives. XTI Aerospace shares plummeted nearly 40% following the announcement of a $16 million public offering, causing investor hesitation. Torrid Holdings' stock price dropped over 38% due to a public offering announcement.

The Federal Reserve proposed easing capital rules for large banks by relaxing the enhanced supplementary leverage ratio requirements. Chairman Powell highlighted the increase in relatively safe assets on banks' balance sheets as a reason for reconsidering these rules, though not all board members support this reform. Meanwhile, Morgan Stanley predicts the Fed will execute seven rate cuts in 2026, with a final rate between 2.5% and 2.75%. On the tech front, Loop Capital suggests NVIDIA's market value could reach $6 trillion, driven by the ongoing AI trend, while analysts from Wedbush foresee Microsoft benefiting significantly from AI and cloud computing advancements, adjusting its target price from $515 to $600.