On a Wednesday morning when American stock futures could not decide which way to lean, the market stood at the threshold of a crowded week. The Federal Reserve was all but certain to trim rates by a quarter point, and the real question was whether its chair would hint at more to come. Beneath the hopeful talk of a trade thaw between Washington and Beijing lay a rally that was carried by only a few hands, and the coming earnings reports from the great technology firms would show whether that narrow confidence could hold until year's end.
Dow Slips as S&P 500 and Nasdaq Edge Higher Ahead of Fed Decision and Big Tech Earnings
With markets near record highs, even a minor miss could spark a sharp pullback.
Mark
Futures were barely moving. Why is this day getting so much attention?
Mimi
Because several things land at once: a Fed decision at 2 p.m., three big tech earnings reports tonight, two more Thursday, and the Trump-Xi meeting Friday.
Mark
The Fed cut seems like a foregone conclusion.
Mimi
Pricing was at 99.5% for a quarter-point cut, to 3.75%-4.00%. So the cut itself isn't the news. Powell's tone on December is.
Luke
Worth saying that's a market-implied probability from one tool, not a statement from the Fed. And nobody knows what Powell will say.
Mark
What's driving Nvidia?
Mimi
It rose 5% Tuesday to $201.03, near a $5 trillion valuation, after GTC 2025 announcements and the trade optimism. Trump says he'll raise the Blackwell chip ban with Xi.
Luke
He said he'll raise it. There's no reported outcome yet. And the hopes for a trade truce are expectations, not a deal.
Mark
Is the rally broad?
Mimi
No. The Russell 2000 fell 0.5% and the equal-weight S&P fund fell 0.9% while the Nasdaq rose 0.8%.
Luke
One more caveat: the article gives the Nasdaq 100 futures move as both 0.3% and 0.02%, so I wouldn't lean on that number.
El Pulso
- Futures wavered in a flat, uncertain open as traders braced for the Federal Reserve's 2 p.m. decision.
- Nvidia neared a $5 trillion valuation on hopes for a trade breakthrough between Trump and Xi, while most of the market lagged behind.
- The Russell 2000 and the equal-weight S&P 500 fell as gains stayed concentrated in a handful of megacap technology names.
- Microsoft, Meta, Alphabet, Apple and Amazon report this week, with heavy AI spending expected to decide whether the rally survives.
- With indexes near record highs, a disappointing report or a shaky Fed signal could trigger a sharp pullback.
On a Wednesday morning when American stock futures could not decide which way to lean, the market stood at the threshold of a crowded week. The Federal Reserve was all but certain to trim rates by a quarter point, and the real question was whether its chair would hint at more to come. Beneath the hopeful talk of a trade thaw between Washington and Beijing lay a rally that was carried by only a few hands, and the coming earnings reports from the great technology firms would show whether that narrow confidence could hold until year's end.
Futures were split early Wednesday, a quiet and undecided open ahead of a crowded day. Dow futures slipped about 0.07%, the S&P 500 was flat, and Nasdaq 100 futures edged higher, though the size of that gain was reported inconsistently. All eyes were on the Federal Reserve's rate decision due at 2 p.m. ET. Markets priced in a near-certain quarter-point cut, and the open question was whether Chair Jerome Powell would signal another reduction in December.
Tuesday had set a hopeful tone. The S&P 500 came within reach of 7,000, and the Nasdaq Composite jumped 0.8% on megacap tech strength. Much of the optimism came from President Trump, who spoke warmly about an expected meeting with Xi Jinping in South Korea, floated trimming tariffs on Chinese goods, and said he would discuss easing limits on Nvidia's Blackwell chips. Nvidia jumped 5% and neared a $5 trillion market value, while Broadcom and SoFi also rose.
The rally, however, was narrow. The Russell 2000 and the equal-weight S&P 500 both fell, and several sectors slipped as investors crowded into a few large names. Analysts cited high valuations and the lingering government shutdown as reasons for caution, even as some strategists stayed optimistic through year-end and warned that the week's flood of news could bring sharp swings.
The week's calendar is packed. Microsoft, Meta and Alphabet report Wednesday evening, Apple and Amazon follow Thursday, and Trump meets Xi on Friday. Investors expect heavy spending on AI and data centers, and with markets near record highs, any disappointment could bring a sharp retreat.
Futures were split early Wednesday, the kind of quiet, undecided open that tends to come before a crowded day. Dow Jones futures slipped 33 points, or 0.07%, and S&P 500 futures were flat. Nasdaq 100 futures were higher, though the source gives two figures for the move, 0.3% in one passage and 0.02% in another, so the size of the gain is unclear.
The main event was the Federal Reserve's rate decision, due at 2 p.m. ET. According to the CME FedWatch Tool, markets were pricing a 99.5% probability of a quarter-point cut, which would bring the target range to 3.75%-4.00%. The open question was whether Fed Chair Jerome Powell would signal further cuts in December.
Tuesday's session had set the mood. The S&P 500 rose 0.2% and touched a record intraday level above 6,900, close to the 7,000 mark. The Dow gained 162 points, or 0.3%, and the Nasdaq Composite jumped 0.8%, led by megacap tech. Oil fell 1.9% to $60.15 a barrel, and the 10-year Treasury yield eased to 3.98%.
Part of the lift came from trade. President Donald Trump sounded upbeat about talks with China and said he expects a "great meeting" with President Xi Jinping on Friday in South Korea. He hinted at cutting the fentanyl-related tariffs on Chinese goods, currently 20%, as part of a broader deal that would cover rare earths. He also said he plans to raise the ban on Nvidia's Blackwell chips with Xi. Thierry Wizman, a strategist at Macquarie Group, said the market sees Trump re-engaging with the rest of the world, that the prospect of higher tariffs on China has diminished, and that this also supports a dovish Fed outlook.
Nvidia was the clearest beneficiary. Its stock jumped 5% on Tuesday to $201.03, bringing its market value close to $5 trillion after product announcements at its GTC 2025 event. Broadcom rose 3% to $327.97, clearing a technical buy point. Tesla gained 1.8% to $460.60, short of a $470.75 level traders were watching. SoFi climbed 5.6% to $31.67 after an earnings beat.
After the close, more results arrived. Visa gained 1% after reporting earnings of $2.98 a share on $10.72 billion in revenue. Seagate rose about 4% on $2.61 a share and $2.63 billion in revenue. Bloom Energy spiked on results that comfortably beat expectations.
The rally, though, is narrow. The Russell 2000 slipped 0.5% on Tuesday and the equal-weight S&P 500 ETF (RSP) fell 0.9%. Energy, industrial, health care and financial sector funds all declined, and ARK's Innovation and Genomics ETFs fell 1% and 2.3%. Analysts also pointed to elevated valuations and the risk from the ongoing government shutdown. Lauren Goodwin, chief market strategist at New York Life Investments, remained optimistic through year-end but warned that the week's run of news, from the Fed to tech earnings to Trump and Xi, could spike volatility.
The schedule is tight. Microsoft, Meta and Alphabet report Wednesday evening, Apple and Amazon on Thursday, and Trump meets Xi on Friday. Investors expect heavy AI and data-center spending from the tech giants, and with markets near record highs, a miss could set off a sharp pullback.
Citas Notables
The prospect of higher tariffs, especially on China, has diminished, which also supports a dovish Fed outlook.— Thierry Wizman, strategist, Macquarie Group
The week's avalanche of news, from the Fed to tech earnings to Trump-Xi, means volatility could spike.— Lauren Goodwin, chief market strategist, New York Life Investments
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