Stocks Rise Ahead of Fed Decision and Tech Earnings; Commodities and Bonds Steady Amid Trade Optimism

Index Update:  U.S. stock futures rose Wednesday, with Dow futures up nearly 100 points, S&P 500 up 0.2%, and Nasdaq 100 up 0.3%, following record closes for all major indexes. Nvidia gained 3% premarket after President Trump said he would discuss its Blackwell chips with China’s Xi, pushing it closer to a $5 trillion valuation. Investors awaited earnings from Microsoft, Meta, and Alphabet, while Verizon rose 2% on reaffirmed guidance, Caterpillar jumped 4.7% on strong Q3 sales, and Boeing added 0.8% despite an earnings miss. The Fed is expected to deliver a 25 bps rate cut later today.

Market Movers:  On Tuesday, the top gainers were Charming Medical Limited (+46.95%), followed by Wetouch Technology Inc. (+28.81%). On the contrary Kandal M Venture Limited. (-34.92%), and Click Holdings Limited (-27.72%) declined the most the same day.

Commodities Update:  WTI crude held above $60 and Brent around $64.5 per barrel on Wednesday after a three-day decline, as investors assessed the impact of U.S. sanctions on Russian oil majors Rosneft and Lukoil alongside a 4-million-barrel U.S. inventory draw. Concerns grew over potential supply disruptions after a Russian tanker bound for India turned back amid halted new orders from Indian refiners. However, skepticism lingered about the sanctions’ effect on global supply as OPEC+ considers another output increase. Meanwhile, gold prices climbed over 1%, reclaiming $4,000 per ounce, supported by bargain buying ahead of the Fed’s expected rate cut and optimism over a potential U.S.–China trade deal. The metal remains on track for a third straight monthly gain, up about 50% this year, buoyed by geopolitical tensions, central bank demand, and inflation concerns.

Macro Updates

U.S. Mortgage Rates Hit One-Year Low, Driving Surge in Refinance and Purchase Applications

U.S. mortgage rates fell for a fourth straight week to 6.3%—the lowest since September 2024—amid declining Treasury yields and expectations of further Fed rate cuts. The drop in rates fueled a 7.1% rise in total mortgage applications, led by a 9% jump in refinancing and a 4.5–5% increase in home purchase applications. The rebound followed weeks of decline, reflecting renewed borrower activity as economic concerns and softer inflation data supported lower borrowing costs.

Fed Poised for Another 25bps Rate Cut as Economic Uncertainty Persists

The Federal Reserve is expected to cut interest rates by 25 basis points at its October 2025 meeting, lowering the target range to 3.75%–4.00%—the lowest since 2022. With a government shutdown delaying key data releases, policymakers are likely to avoid major new guidance for December. Limited available data show headline and core inflation both at 3%, steady unemployment at 4.34%, and modest private job gains. Markets also anticipate the Fed may soon pause the runoff of its $6.6 trillion Treasury portfolio.

Bonds Commentary:  U.S. 10-year Treasury yields held near 3.98% on Wednesday as investors awaited the Fed’s expected 25 bps rate cut and guidance from Chair Powell on future easing, with another reduction in December already anticipated. The prolonged government shutdown, now in its fifth week, has delayed key economic data, adding uncertainty. Markets also looked ahead to the upcoming Trump–Xi meeting, expected to finalize a trade framework to halt new U.S. tariffs and China’s rare earth export limits.

Futures Update:  U.S. stock futures edged slightly higher on Wednesday as investors awaited key tech earnings and the Federal Reserve’s rate decision. Dow futures were up 0.2%, S&P 500 futures rose 0.2%, and Nasdaq 100 futures gained 0.4%. All three major indexes closed at record highs on Tuesday, with the S&P 500 briefly surpassing 6,900 intraday and nearing the 7,000 mark. Market sentiment was also lifted by news of an upcoming meeting between Presidents Trump and Xi aimed at finalizing a deal to avoid new tariffs and sanctions.

Stocks experienced fluctuations throughout Tuesday's trading session but largely maintained a positive tone, ending the day mostly higher. The S&P 500 gained 15.73 points, or 0.23%, closing at 6,890.88. From a technical standpoint, the index found support at important levels and gradually moved upward, indicating the potential for continued upward momentum in the near term. Moreover, the 14-day Relative Strength Index (RSI) is rising above the midpoint, reinforcing a positive outlook. Key support levels are around 6,770, with resistance expected near 6,955.