Fresh Record Highs Ahead of Fed, China, Mega Caps
Published as of: October 29, 2025, 9:25 a.m. ET
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| The markets | Last price | Change | % change |
|---|---|---|---|
| S&P 500® index |
6,890.89 |
+15.73 |
+0.23% |
| Dow Jones Industrial Average® |
47,706.37 |
+161.78 |
+0.34% |
| Nasdaq Composite® |
23,827.49 |
+190.03 |
+0.80% |
| 10-year Treasury yield |
3.98% |
-0.01 |
-- |
| U.S. Dollar Index |
98.91 |
+0.24 |
+0.25% |
| Cboe Volatility Index® |
16.43 |
+0.01 |
+0.06% |
| WTI Crude Oil |
$60.14 |
-$0.01 |
-0.02% |
| Bitcoin |
$113,190 |
-$555 |
-0.49% |
(Wednesday market open) The Federal Reserve rate decision at 2 p.m. ET today lacks drama. Investors expect a 25-basis point cut and then look ahead to mega cap earnings and trade talks. However, no Fed meeting should be taken lightly. "Powell's tone will be scrutinized, with considerable interest in what he says about inflation and jobs given the lack of government economic data during the shutdown," said Michael Townsend, managing director, legislative and regulatory affairs at Schwab.
Other things to look for include the chance that Powell might announce the end of the Quantitative Tightening (QT) program that's reduced the Fed's balance sheet the last few years. The program was established to combat spiking inflation, but the balance sheet is now back to near normal levels and there have been some hiccups in short-term funding markets, indicating the level of reserves may be getting low. Also, the absence of data due to the government shutdown could prevent Powell from providing specific information on the number of rate cuts—if any—ahead. "This is significant since the market is discounting a steady pace of cuts bringing the fed funds rate to under 3% by mid-2026," said Kathy Jones, chief fixed income strategist at Schwab. "There could be volatility at the short end of the curve if he doesn’t sound dovish at the press conference."
On Tuesday, only three S&P 500 sectors climbed, but with Nvidia (NVDA) soaring 5% and Microsoft (MSFT) up 2%, it was enough for another record S&P 500 index close. The tech rally accelerated after The Wall Street Journal reported Presidents Trump and Xi could emerge from their Thursday meeting with a plan to lower fentanyl-related tariffs on imports from China. The idea that tariffs could lighten seemed to ignite investor enthusiasm. Trump slapped 20% fentanyl-related tariffs on Chinese imports earlier this year. The leaders are also expected to discuss rare earths and soybeans, and major U.S. indexes continued to rise this morning on hopes for a positive outcome after overnight gains in Tokyo and Shanghai.
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Three things to watch
- Digging deeper into mega cap results: Microsoft, Meta Platforms (META), and Alphabet (GOOGL) unveil results after the close, and are expected to report earnings growth of 7% to 11%. Expected revenue growth is in the mid-teens to low-20s percentage wise. Questions each face include the level of their widely expected earnings "beats" and what percentage of "beat" the market considers good enough to keep supporting their stocks. Last quarter, even earnings that easily topped consensus weren't always enough to excite the market. Data center firms seem convinced they must keep growing their infrastructure to keep up with competitors, but that could hurt bottom-line growth and possibly already has as earnings growth is down over the last year for the Magnificent Seven. Another question is whether these big companies can point to areas where they've been able to "monetize" AI, or in other words show real-world benefits to products or their business performance from the technology that starts to justify the spending.
- AI spending in focus as mega caps report: Investors are used to great news from Microsoft, Meta Platforms, and Alphabet, so anything that looks less rosy often gets attention and can hurt shares. AI spending will be front and center. Guidance on expenditures for the current quarter is key, since investors want to know if the pace can continue. And chip makers like Nvidia and Advanced Micro Devices (AMD)—among the beneficiaries of this spending—could see their shares affected. Some of the heavy AI spending depends on resilience in the advertising businesses of companies like Meta and Alphabet. If a slower economy or AI competition cause demand for ads to sag, that could ultimately take a bite out of AI capital expenditures and possibly filter down into AI-chip growth. "Insatiable demand for computing power doesn't appear to show any signs of slowing," said Nathan Peterson, director of derivatives analysis at the Schwab Center for Financial Research.
- Shutdown nearing November 1 catalyst date: This Saturday could be a possible "catalyst for change" in shutdown dynamics, my colleague Townsend said. That's when money for the food stamps program is projected to run out and the enrollment period for the Affordable Care Act begins. Federal workers missed another paycheck last week and many federal agencies have stopped functioning, raising concerns about a possible economic slowdown. Powell might be asked at his press conference to address the shutdown's potential impact on economic growth. Both investors and the Fed may lack the full sweep of data even if the shutdown resolves itself soon. "We have now missed the reference period for October payrolls, which doesn't guarantee a missing jobs report, but does mean it will take longer to understand the full labor picture heading into the end of the year," said Kevin Gordon, head of macro research and strategy at Schwab. This morning, D.C. publication Politico reported that Senate Majority Leader John Thune said bipartisan shutdown talks have "picked up."
On the move
- Nvidia catapulted 5% Tuesday and added nearly an additional 3% this morning to new all-time highs on news that it would partner with Oracle (ORCL) to build the U.S. Department of Energy's largest AI supercomputer for scientific discovery and with Uber (UBER) on the company's next-generation robotaxi and autonomous delivery fleets. Nvidia's market cap is approaching $5 trillion, and CEO Jensen Huang said Nvidia expects $500 billion in AI chip orders.
- Nvidia also rallied as Bloomberg reported that Trump plans to discuss Nvidia's Blackwell chip with Xi. Restrictions on exports of Nvidia's chips to China have been a sticking point in the trade relationship and have hurt Nvidia's revenue.
- Shares of chip companies including Micron (MU), Advanced Micro Devices, and Intel (INTC) rose this morning, apparently in the wake of Nvidia's rally and hopes for a deal with China that would allow more U.S. chip sales there. Semiconductors are up nearly 8% over the last four sessions.
- CVS Health (CVS) climbed nearly 5% ahead of the open as earnings and revenue topped estimates. The company raised its adjusted profit outlook and cited improvement in its insurance business.
- Booking Holdings (BKNG) climbed 4% after the travel technology company beat revenue and earnings consensus and raised guidance. Gross bookings grew 14% year over year, the company said.
- Caterpillar (CAT) moved up more than 4.5% this morning after quarterly revenue and earnings easily topped estimates. Construction sales rose 7%, helped by the commercial side of the business. Energy and transportation sales rose 17%.
- Boeing (BA) slipped almost 1% after reporting earnings despite quarterly revenue outpacing estimates. Losses per share were far worse than expected, though the company blamed that on a one-time charge related to the 777X program. Free cash flow improved. Big news pulled in at the tarmac last week when the Federal Aviation Administration said it would allow Boeing to produce 737 Max planes at a rate of 42 per month, up from the 38 limit it had produced them at, The New York Times reported.
- Verizon (VZ) added nearly 4% in pre-market action as the company's earnings beat expectations even though sales narrowly missed. The company topped estimates for quarterly subscriber additions, and reiterated full-year guidance.
- Etsy (ETSY) dropped 8% after the online marketplace announced its CEO is stepping down at the end of the year.
- Centene (CNC) climbed 9% ahead of the open after strong third quarter results and an increased quarterly outlook.
- There's a sprinkling of data today, including a 7.1% rise in weekly mortgage applications. Pending home sales are due at 10 a.m. ET, and the Briefing.com consensus is for a 1% rise in September, down from 4% in August.
More insights from Schwab
Shutdown update: The politics are about to get trickier, said Townsend in his new Washington: What to Watch Now. "With the Senate no closer to passing the temporary extension of funding to reopen the government broadly, Republican leaders are considering votes on narrower proposals," he wrote. These include paying air traffic controllers, military personnel, and federal workers, along with funding the SNAP food assistance program.
" id="body_disclosure--media_disclosure--125471" >Shutdown update: The politics are about to get trickier, said Townsend in his new Washington: What to Watch Now. "With the Senate no closer to passing the temporary extension of funding to reopen the government broadly, Republican leaders are considering votes on narrower proposals," he wrote. These include paying air traffic controllers, military personnel, and federal workers, along with funding the SNAP food assistance program.
Solana ETPs hit the market: Amid the government shutdown, the U.S. Securities and Exchange Commission (SEC) provided its approval of the first exchange-traded product linked to the spot price of the cryptocurrency solana. Learn more in our update.
Round lots regulatory changes: New regulations will impact how bid, ask, and last sizes display on Schwab platforms starting November 3, 2025. The updates will take effect automatically—no client action is required. Learn more in this explanatory article from Schwab.
Don't overlook municipal bonds: Though "munis" are among the worst-performing fixed income asset classes this year, there are compelling reasons for investors to consider them. These include high yields and high ratings, wrote Schwab's Cooper Howard, director, fixed income strategy, in his latest bond market analysis.
Chart of the day
Data sources: S&P Dow Jones Indices. Chart source: thinkorswim® platform.
Past performance is no guarantee of future results.
For illustrative purposes only.
Though market breadth slipped a bit Tuesday and the percentage of S&P 500 stocks trading over their 200-day moving average ($SPXA200R—candlesticks) was 61.4% by midday, down from recent highs above 65%, it's still in a healthy place. And the market's Relative Strength Index, or RSI (lower chart) recently was at 49, well below the 70 level normally seen as overbought. "For now, the background conditions for equities tilt favorably as nearly two thirds of stocks are above their 200-day moving average and equal-weighted indexes have maintained strength over the past month," Schwab's Gordon said.
The week ahead
Check out the investors' calendar for a summary of the top economic events and earnings reports on tap this week.
October 30: Third-quarter advance GDP and initial and continuing jobless claims, Bank of Japan rate decision, ECB rate decision, and expected earnings from Anheuser-Busch InBev (BUD), Eli Lilly (LLY), Merck (MRK), Mastercard (MA), Bristol-Myers Squibb (BMY), Cheniere Energy (LNG), and Stellantis (STLA).
October 31: September PCE prices and PCE core prices, personal income and spending for September, and earnings expected from Exxon Mobil (XOM), Chevron (CVX), AbbVie (ABBV), AON (AON), W.W. Grainger (GWW), Colgate-Palmolive (CL), and Dominion Energy (D).
November 3: October ISM Manufacturing Index and expected earnings from Palantir Technologies (PLTR), Hims & Hers Health (HIMS), Clorox (CLX), and Diamondback Energy (FANG).
November 4: September factory orders, September job openings (JOLTS), and expected earnings from Shopify (SHOP), Uber Technologies (UBER), Eaton Corporation (ETN), Pfizer (PFE), Spotify (SPOT), Advanced Micro Devices (AMD), Arista Networks (ANET), and Amgen (AMGN).
November 5: October ADP employment, October ISM Services PMI®, and expected earnings from McDonald's (MCD), Novo Nordisk (NVO), AppLovin (APP), Qualcomm (QCOM), Arm Holdings (ARM), and DoorDash (DASH).