Dow futures are trading in green on Wednesday, buoyed by optimism surrounding ongoing AI advancements and strong corporate earnings, especially in the tech sector.
Investors await the Federal Reserve’s highly anticipated policy decision, with a widely expected 25-basis-point rate cut.
The market will also be watching closely at Fed Chair Jerome Powell’s post-meeting remarks on the pace of future easing.
The market mood is further supported by hopes of easing US-China trade tensions ahead of a high-level meeting this week, keeping investor sentiment cautiously optimistic despite some volatility risks.
5 things to know before Wall Street opens
1. The Federal Reserve is widely expected to announce a 25-basis-point rate cut today, October 29, bringing the federal funds rate to 3.75%-4.00%.
This marks the second consecutive reduction this year, following September’s quarter-point cut that lowered rates to 4.00%-4.25%.
The policy decision will be announced at 2:00 PM ET (11:30 PM IST), with Fed Chair Jerome Powell’s press conference scheduled for 2:30 PM ET (12:00 AM IST).
Market expectations show a 99.4% probability of the cut. However, the decision comes amid significant uncertainty as the ongoing government shutdown has prevented the release of key economic data, including September’s jobs report.
Powell’s remarks will be crucial for gauging the Fed’s approach to future cuts, particularly December’s meeting, as officials balance concerns over a cooling labor market against persistent inflation pressures.
2. A big lineup of tech heavyweights is reporting earnings after the market closes on Wednesday, as Microsoft, Meta, and Alphabet are all on deck with their results.
Analysts expect Microsoft to come in with earnings of about $3.65 per share on $75.35 billion in revenue, that’s up nicely from the $65.59 billion it pulled in during the same quarter last year.
Meta is projected to post EPS of $6.65 with $49.3 billion in sales, and Alphabet is forecast to deliver EPS of $2.33 on roughly $99.53 billion in revenue.
It’s not just tech, either. Caterpillar, ServiceNow, Boeing, Verizon, and CVS Health are also reporting today.
CVS has already shared its numbers: $102.9 billion in revenue, up 7.8% year over year, and adjusted earnings of $1.60 per share. Verizon reported $33.8 billion in revenue and EPS of $1.17.
3. Nvidia is closing in on a milestone no company has ever hit before, a $5 trillion market value, thanks to a massive AI-fueled rally.
On Wednesday, the stock jumped more than 3% in premarket trading after CEO Jensen Huang said the company has racked up $500 billion worth of orders for its AI chips.
Nvidia also announced that it plans to build seven new supercomputers for the US Department of Energy, further cementing its position at the center of the AI boom.
The company’s explosive growth is keeping investors fired up as the stock edges closer to that record-breaking $5 trillion mark.
4. US Treasury yields remained mostly stable on Wednesday as investors awaited the Federal Reserve’s policy decision following its two-day meeting.
The 10-year Treasury yield edged up slightly to about 3.99%, while the 2-year yield was steady near 3.50%, reflecting market anticipation of a 25-basis-point rate cut.
The ongoing US government shutdown has clouded economic data releases, adding uncertainty to the outlook.
Investors will closely watch Fed Chair Jerome Powell’s post-meeting remarks for guidance on future rate cuts and policy direction, amid keen attention on US-China trade developments expected this week.
5. Asian markets were mostly higher on Wednesday. Japan’s Nikkei 225 jumped 2.17% to a fresh record of 51,307.65, and South Korea’s Kospi also hit a new all-time high.
The rally came on the back of renewed excitement around AI after Nvidia revealed $500 billion in chip orders and plans to build supercomputers for the US Department of Energy.
Over in Europe, stocks were more muted. The STOXX 600 was little changed at 575.66 as investors worked through earnings reports and waited for the Fed’s rate decision.
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