Markets closed mixed Wednesday as investors digested a double dose of high-stakes events: a divided Federal Reserve signaling caution on further rate cuts, and an unexpected détente between Presidents Trump and Xi that trimmed tariffs and eased trade tensions.

The Fed delivered its second consecutive 25-basis-point cut, lowering rates to the 3.75%–4.00% range, but Chair Jerome Powell surprised markets by stressing that another reduction in December is “far from a foregone conclusion.”

The comment, his sharpest pushback against market expectations in months, prompted a reversal in both bonds and equities. Treasury yields jumped, with the 10-year closing near 4.07%, and futures pricing for a December cut fell from 90% to 60%.

The S&P 500 finished flat after an early climb, while the Dow slipped 0.2% and the Nasdaq eked out another record close, supported by resilience in semiconductors and energy stocks.

Gold settled just above $4,000 an ounce, rebounding after Powell’s remarks lifted real yields. Oil edged slightly lower to $60.48 per barrel as traders balanced strong U.S. inventory drawdowns against renewed OPEC+ supply concerns. 

The dollar strengthened broadly, gaining 0.7% against major peers, as traders priced out another near-term cut and yields moved higher.

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S&P and Nasdaq futures are flat ahead of Thursday’s open as the market continues to unpack Wednesday’s events. While the October rate cut confirmed what was well telegraphed, the outlook for future easing got murkier. 

Powell acknowledged “strongly differing views” and emphasized that the data gap caused by the government shutdown leaves the Fed navigating “in the fog.”

Still, his comments on growth and inflation hinted at an economy with more stamina than softness. He cited firmer consumer spending, rising GDP estimates near 4%, and inflation that remains elevated around 2.8%, keeping the debate over “neutral” policy alive. 

Meanwhile, corporate earnings continue to deliver, with 82% of S&P 500 companies beating expectations by an average of 6.6%. Yet the spotlight has now turned to the earnings that have already reshaped the market’s tone. 

Microsoft, Alphabet, and Meta all reported after Wednesday’s close, delivering mixed results that tempered investor enthusiasm. Strong cloud and advertising revenues from Google were offset by cautious guidance from Microsoft and Meta’s higher spending on AI, pulling futures lower overnight.

Attention now shifts to Apple and Amazon, whose results after today’s close will determine whether Big Tech’s leadership can hold through quarter-end, or whether fatigue is finally setting in.

The Federal Reserve’s message to markets was clear: patience. The central bank cut rates by 25 basis points to 3.75%–4.00% and announced an end to its balance-sheet runoff on December 1, but Chair Jerome Powell stressed that the market is getting ahead of itself with the expectation for another reduction this year.

His language marked a sharp pivot toward caution, revealing widening divisions within the committee. Two members dissented, one calling for a larger cut, another for none, while Powell emphasized that meaningful policy shifts should wait until the Fed regains full visibility into labor and inflation data.

Global peers struck similar tones. The Bank of Japan held rates steady while hinting at a possible hike in December, sending the yen to multi-decade lows. 

The European Central Bank meets later today and is expected to keep policy unchanged for a third consecutive time. 

Together, these moves underscore a coordinated pause in the global easing cycle, one that favors stability over stimulus heading into year-end.

The geopolitical backdrop turned unexpectedly constructive. In Busan, South Korea, Presidents Trump and Xi Jinping struck a one-year agreement reducing U.S. tariffs on Chinese goods from 57% to 47%, tied to China’s pledge to curb fentanyl exports, resume agricultural purchases, and pause new rare-earth export restrictions. 

Both sides agreed to suspend retaliatory shipbuilding levies and to hold further negotiations on technology and supply-chain cooperation.

Trump hailed the meeting as a “12 out of 10,” while Xi described the outcome as “dialogue over confrontation.” The deal offers near-term relief for global trade flows, though analysts caution it remains a tactical truce, not a structural reset. Beijing’s leverage in rare-earth processing and Washington’s scrutiny of advanced chip exports remain points of friction.

For investors, the détente added just enough certainty to keep volatility contained, even as questions linger over how durable the calm will be.

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In Washington, the government shutdown entered its 30th day, with the Congressional Budget Office warning the closure could cost the U.S. economy up to $14 billion if it lasts eight weeks. 

The deadlock over Affordable Care Act subsidies continues to block progress, even as the nation’s largest federal worker union urges both parties to approve back pay and reopen agencies.

Separately, President Trump told reporters aboard Air Force One that he has ordered the Pentagon to begin “testing nuclear weapons on an equal basis with Russia and China,” though it remains unclear whether this refers to delivery systems or actual warheads. 

The U.S. has not conducted a live nuclear test since 1992. The comments drew sharp responses from arms control experts, who warned such a move could erode decades of global restraint.

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AAPL         AMZN
LLY            MA
MRK          SPG
GILD         SYK
MO            CMCSA
SO             BMY
ICE            RBLX
COIN         CI
HWM         MNST
MSI            AJG
RSG          EPD
PWR          ALNY
MSTR        LHX
LNG          MPWR
AMP          XEL
EWAME    WDC
KMB          RMD
VMC          TEAM
HSY          CAH
WEC          ED

Asia: Nikkei +0.04%, Shanghai -0.73%
Europe: FTSE -0.47%, DAX -0.16%

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Markets face a crossroads defined by restraint rather than fear. The Fed’s caution underscores confidence in underlying growth but signals that easy money can no longer be assumed. At the same time, the Trump–Xi truce injects stability into trade without resolving deeper rivalries.

Investors will look to Big Tech tonight for direction, but the day’s real message may be simpler: policy, patience, and profit margins are finally converging in a more disciplined market.