Market Ahead of Big Test: Fed Decision, Megacap Earnings in Focus 29/10/2025

HOT stories for today

Market wrap:

• Wall Street extended its record-breaking streak for a second straight session Tuesday, with major benchmarks pushing further into uncharted territory. The S&P 500 inched up 0.2%, the Dow Jones Industrial Average advanced 162 points, or 0.3%, and the Nasdaq Composite outperformed with a 0.8% gain. In Asia, Japan’s Nikkei 225 surged past the 51,000 level, supported by optimism over Tokyo–Washington trade relations and mounting expectations that the Federal Reserve will move ahead with a rate cut. 
• Investors are wagering that market momentum can endure a heavy slate of tests this week. Trade tensions between the U.S. and China appear to have eased following weekend progress, but focus now turns to President Donald Trump’s meeting with Chinese President Xi Jinping in South Korea for fresh direction. The improving diplomatic backdrop helped lift sentiment Tuesday, as traders largely anticipate the Fed will trim rates by a quarter point at the close of its policy meeting today. 
• Meanwhile, attention is shifting to the “Magnificent Seven” earnings lineup. Five of the group. Meta and Microsoft release results after Wednesday’s close, while Apple and Amazon follow on Thursday. Elsewhere, gold slipped into pullback territory after recent highs, as investors reassess rate expectations and risk appetite. Bitcoin remains under pressure, struggling to gain traction amid a broader rotation out of speculative assets.

Fed Poised to Cut, but Data Gaps and Politics Stir Doubts

• The Federal Reserve is expected to trim rates by a quarter point this week and could ease further at its next two meetings, according to CNBC’s October Fed Survey. But economists and strategists warn that policy risks are rising amid scarce government data from the shutdown, lingering inflation, and questions about political influence.Ninety-two percent of respondents expect a cut, though only two-thirds think it’s warranted. Some, like Richard Bernstein of Richard Bernstein Advisors, argue that “politics rather than financial conditions” are driving decisions as GDP tracks near 4% and inflation remains elevated.
• After this week’s move, most foresee another cut in December and possibly one more in January, totaling about 100 basis points of easing through next year, bringing the fed funds rate near 3.2% by the end of 2026. Concerns about frothy AI stocks persist, with 80% of respondents calling them overvalued by more than 20%. They see the S&P 500 ending the year near current levels, rising modestly in 2026 before topping 7,200 by 2027. Most say the government shutdown has little impact on markets, but few are confident in the accuracy of current data. Growth forecasts edge up to 1.9% this year, with inflation seen easing slowly from 3% to 2.6% by 2027. Tariffs remain the top risk to the expansion, though their inflation impact has so far been muted.

Stocks on the move:
 

• Visa (V): Shares rose 1% after quarterly earnings and revenue topped estimates. Adjusted EPS was $2.98 on $10.72 billion in revenue, versus LSEG forecasts of $2.97 and $10.61 billion.
• Seagate Technology (STX): Gained over 4% after reporting strong fiscal Q1 results. Adjusted EPS was $2.61 on $2.63 billion in revenue, beating expectations of $2.37 and $2.55 billion.
• Caesars Entertainment (CZR): Dropped 9% after missing Q3 estimates as Las Vegas visits fell. Reported a 27-cent loss per share on $2.87 billion in revenue, versus a 5-cent loss expected on $2.89 billion.
• Mondelez International (MDLZ): Fell nearly 5% after cutting its full-year organic growth outlook to 4% from 5%. Still beat Q3 earnings and revenue estimates.
• Enphase Energy (ENPH): Slid 8% despite beating Q3 earnings expectations. Shares remain down over 46% this year but are up 3.7% this month.

Watchlist: NVDA, META, V, STX, CZR, ENPH, CAKE, MSFT, CAT, BA, VZ

Key Economic Events Today:

10:00 am: USD Pending Home Sales
02:00 pm: Federal Funds Rate Decision
02:30 pm: FOMC Press Conference


Earnings


BMO (Before Market Open): Boeing (BA) and Verizon Communications (VZ), Caterpillar (CAT)
AMC (After Market Close): Meta Platforms (META), Microsoft (MSFT), Alphabet (GOOG), Starbucks (SBUX), Chipotle Mexican Grill (CMG), Teladoc Health (TDOC), and Carvana (CVNA)


The TEFS Analyst team wishes you a successful day!