The markets are starting the final week of October with momentum from record highs in U.S. stocks, driven by cooler-than-expected September inflation data leading to expectations for continued Federal Reserve rate cuts. This week will feature an extraordinary convergence of market-moving events, including a virtually certain Fed rate cut and a press conference by Chair Powell, mega-cap tech earnings from Alphabet, Meta, Microsoft, Apple, and Amazon, as well as a high-stakes meeting between President Trump and Chinese President Xi Jinping at the APEC summit. Investors are hopeful for a U.S.-China trade deal to avoid additional tariffs. The ongoing government shutdown continues to impact federal operations, with critical economic data still on schedule.
The Federal Reserve meeting on Wednesday is expected to result in a rate cut, with attention turning to Chair Powell’s press conference for insights into future policy changes. The focus will be on potential adjustments to quantitative tightening policy and balance sheet reduction. Mega-cap tech earnings from the likes of Alphabet, Meta, Microsoft, Apple, and Amazon will provide crucial insights into the technology sector’s performance and validate AI investment narratives. The Trump-Xi summit on Friday is a key event that could either resolve trade tensions or escalate the trade war, impacting market sentiment significantly. Earnings from energy giants Exxon Mobil and Chevron will offer insights into oil and gas market conditions, while Friday’s GDP report will provide an assessment of economic growth in the third quarter.
Inflation data, Fed policy decisions, mega-cap tech earnings, and the Trump-Xi summit will shape year-end portfolio positioning. The Core PCE Price Index on Friday will be closely watched for any signs of sustainable inflation trends. The week’s outcomes will influence sector rotation decisions and risk appetite in the final months of 2025. Investors will need to balance the optimism from dovish Fed policy with concerns about economic growth sustainability and technology valuations.
Read more at Barchart: Earnings, Trade War and Other Can’t Miss Items this Week