Fed Holds Rates as Inflation Fears Grow Amid AI Spending Concerns

The US Federal Reserve has kept interest rates steady amid growing inflation fears. The decision comes as investors are increasingly concerned about artificial intelligence (AI) spending, with Meta and Microsoft reporting quarterly earnings.

Met's cloud business saw sales boosted by AI investment reaching $41 billion. However, the company's shares dropped due to falling profits and a weak sales forecast. In contrast, Microsoft reported its cloud business also benefits from AI investment.

The Federal Reserve's decision may face scrutiny as Iran's war threat could lead to further inflation jolts. The Bank of Japan is expected to keep rates unchanged at its meeting on Friday, while UK oil and gas companies are shifting their focus away from the North Sea towards foreign investment opportunities.