Markets Face a Defining Week: Fed, Big Tech, and the Trade War
U.S. stock indexes entered the final week of October at fresh record highs, supported by softer September inflation data. The Consumer Price Index rose just 0.3% for the month and 3% year-over-year—both below forecasts—boosting expectations for further rate cuts by the Federal Reserve and fueling optimism across markets.
But this week brings a perfect storm of major events: the Fed’s policy meeting, a flood of Big Tech earnings, and the critical meeting between President Donald Trump and Chinese President Xi Jinping at the APEC summit in South Korea.
The Fed Meeting: Rates and Liquidity Policy
Wednesday’s Federal Reserve meeting is almost certain to deliver another rate cut. The market’s focus will be on Chair Jerome Powell’s 2:30 p.m. press conference, where investors expect hints about the December meeting and possible changes to the central bank’s balance sheet policy.
With inflation cooling and the economy remaining resilient, the Fed has room to act cautiously. Any signal about pausing the balance sheet runoff could imply higher liquidity and potentially lift rate-sensitive sectors such as real estate and technology. Powell’s remarks on trade tensions, the government shutdown, and overall economic momentum will guide expectations for the remainder of the year.
Big Tech Earnings: Testing the AI Optimism
This week brings an unprecedented wave of mega-cap tech earnings. Alphabet, Meta, and Microsoft report on Wednesday, followed by Apple and Amazon on Thursday.
These five companies form the backbone of the U.S. market and represent the core of the AI investment narrative. Google’s search and cloud performance, Meta’s ad business and Reality Labs losses, and Microsoft’s Azure and Copilot monetization will all shape investor sentiment. Apple’s iPhone demand in China and services revenue growth, together with Amazon’s AWS and advertising performance, will complete the picture.
Collectively, these results will determine whether massive AI investments remain justified—or if investors begin to question the sustainability of current tech valuations.
Trump–Xi Meeting: Deal or Escalation
Friday’s meeting between President Trump and President Xi at the APEC summit could dramatically shift market sentiment. It comes just one day before Trump’s planned 100% tariff hike on Chinese imports, set for November 1.
Investors hope for at least a temporary truce that delays escalation and sets the stage for continued negotiations. Any agreement addressing rare-earth exports, IP protection, or technology transfers could spark a relief rally, especially in sectors like semiconductors, autos, and industrials.
However, if the talks fail or tensions worsen, volatility could surge, prompting investors to take defensive positions before the weekend.
Energy and the Macro Picture
Oil majors Exxon Mobil and Chevron will report earnings on Friday, offering critical insight into global energy demand, production strategies, and capital allocation.
Meanwhile, Thursday’s Q3 GDP release will provide the first full look at U.S. economic growth last quarter. Markets will assess the balance between consumer spending, business investment, and exports to gauge the economy’s overall strength heading into year-end.
Inflation and Year-End Positioning
Friday’s Core PCE Price Index—the Fed’s preferred inflation gauge—will confirm whether disinflation continues. Combined with the Fed decision, Big Tech earnings, and the Trump–Xi summit, it creates a highly charged environment for portfolio positioning into the final stretch of 2025.
Investors now face a delicate balance: optimism from dovish Fed policy and potential trade resolution versus fears of slowing growth and overextended tech valuations. The outcomes of this week could shape sector rotations, risk appetite, and market tone for the rest of the year.
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Twitter: @BigStakeTrades