Fed Lowers Interest Rates as Data Remain Unclear Due to Shutdown, While Focus Shifts to Tech AI Profits and Trade Agreement
The U.S. Federal Reserve is on track to lower interest rates for the second meeting in a row, suggesting a possible change in monetary policy as markets prepare for a crucial week filled with major corporate earnings and important diplomatic events. The Fed is widely anticipated to cut its benchmark rate by 25 basis points this Wednesday, and investors are paying close attention to how the central bank manages an uncertain economic environment shaped by a government shutdown and ongoing international trade disputes, according to a
At the same time, Wall Street's attention shifts to leading technology firms, with
This week’s most significant development could be the meeting between Trump and Xi at the APEC summit in South Korea. Following months of rising trade friction, the U.S. and China have reportedly reached a tentative deal to postpone Trump’s proposed 100% tariffs on Chinese imports and to halt new restrictions on rare earth exports, according to a
The anticipated Fed rate cut is also likely to mark the conclusion of quantitative tightening, as officials weigh reinvesting maturing assets to help steady the 10-year Treasury yield, according to Investors.com. However, the ongoing government shutdown has left the economic calendar thin, making it harder to assess the state of the job market. With unemployment worries lingering, the possibility of another rate cut in December remains a key topic for investors, as highlighted in Morningstar’s outlook.
Throughout the week, market participants will analyze earnings releases for evidence of progress in monetizing AI. Google's AI Overviews and Meta’s expensive AI initiatives are under the microscope, while Apple’s upcoming iPhone 17 could provide a short-term boost in sales, according to the Investors.com preview. So far, the Magnificent Seven’s steady record of beating earnings forecasts has fueled a three-year rally, but analysts warn that slower profit growth—expected to reach 14% in the third quarter—may challenge investor optimism, as reported by a
