Stocks edge higher amid geopolitics, earnings reports and the Fed

Macroeconomic/ geopolitical developments

• US equities posted gains for both the week and the month, with the S&P 500, Nasdaq, and Dow all advancing as a late-week rebound in tech and supportive sentiment outweighed midweek volatility linked to the Federal Reserve decision and ongoing economic uncertainty.

• The Fed delivered a widely anticipated 25 bps rate cut, but Chair Powell signalled that further easing in December is not guaranteed amid limited economic data and divided committee views, prompting markets to scale back expectations for additional near-term cuts.

• The meeting between Presidents Trump and Xi produced a one-year pause in escalating tariffs and export restrictions, offering short-term relief to markets and supply chains, but leaving broader strategic tensions unresolved.

• Earnings from Amazon and Alphabet beat expectations and boosted sentiment with strong cloud momentum, while Microsoft, Apple and Meta saw more cautious market reactions amid higher investment spending and uneven growth signals.
• With official labor market data delayed by the government shutdown, investors will look to ISM PMIs, the ADP report and a broader slate of corporate earnings to gauge economic momentum and sentiment, as the Fed’s more cautious tone and uneven hiring trends leave markets sensitive to incoming signals.

Global financial market developments

• US and global equity averages edged higher.
• US and European bond yields were higher on the week
• The US Dollar Index moved towards a multi month high.
• Gold futures retreated further lower from the October record high.
• Oil futures prices fell from a multi-week peak.

Key this week

Central Bank Watch: It’s another packed week for central banks, with the Reserve Bank of Australia’s Rate Decision, Monetary Policy Statement and Press Conference on Tuesday, Bank of Japan Meeting Minutes on Wednesday and the Bank of England’s Rate Decision, Policy Report, and Minutes on Thursday.

Macro Data Watch: Key macro data this week includes Global PMI readings on Monday and Wednesday, with the US Jobs Report scheduled for Friday (contingent on the US government shutdown). Other notable releases include EU Retail Sales on Thursday and Canada’s Jobs Report on Friday.

Earnings Watch: The US earnings season presses on, shifting focus from mega-cap tech to a broader lineup, with Berkshire Hathaway B and Palantir reporting Monday, Uber, AMD and Spotify on Tuesday, and Applovin and McDonald’s scheduled for Wednesday.

Steve Miley (The Market Chartist)

Editor in chief

Steve Miley is the Market Chartist and has 32 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Mar... Continued