Fed expected to hold rates, hawkish Warsh signal watched
The FOMC concludes its two-day meeting with a decision at 2:00 p.m. ET, widely expected to hold the target range at 3.75%-4.0% after a 25bp hike in September. Markets assign roughly 92% odds to a hold, but Chair Kevin Warsh's post-decision commentary is the key risk, with some expecting signals of further hikes given sticky inflation. A hawkish tone would pressure equities and lift the 2-year yield, while a dovish tilt would support risk assets.
Microsoft and Alphabet Q3 earnings after the close
Microsoft and Alphabet report September-quarter results after the bell Wednesday, the first of the "Magnificent Seven" to do so. Results will be scrutinized for AI-related capex and Azure/Cloud growth, with mounting shareholder scrutiny over returns on AI investments. A beat-and-raise would extend the AI trade; disappointment could trigger a broad tech selloff given elevated positioning.
SK Hynix record profit sparks global AI chip rally
SK Hynix posted record quarterly revenue and operating profit, beating estimates, and announced roughly 100 trillion won ($75.5 billion) in shareholder returns including dividends and buybacks. The company signaled AI-driven memory demand will keep markets tight until at least 2030, triggering a broad rally in chip and AI-exposed shares globally (Samsung +9%, Micron +3% after hours, KOSPI +7%). The read-through supports US semis (MU, AMD, INTC, ARM, MRVL) into the open.
Significant Geopolitical Events with US Economic Impact
Oil falls on Iran peace hopes, easing inflation pressure
WTI crude fell nearly 1% after Iran's Supreme Leader Mojtaba Khamenei urged officials to meet conditions for ending the war with the US, with senior officials from Saudi Arabia, Pakistan, and Turkey traveling to Tehran for talks. Lower oil prices pushed Treasury yields lower and supported equity futures, easing near-term inflation pressure and reducing the geopolitical risk premium.
Third-quarter GDP and the September PCE price index, the Fed's preferred inflation gauge, are released Thursday and will factor directly into rate expectations. Core PCE is seen remaining well above the 2% target, so a hot print would reinforce hawkish Fed bets and pressure equities and Treasurys, while a cooler reading would support risk assets.
Robinhood fell nearly 5% after Q3 revenue came in line and it lowered the high end of full-year 2026 adjusted opex guidance, with ARPU slightly below consensus. Seagate sank 6% despite an earnings and revenue beat with better-than-expected guidance, and NXP Semiconductors tumbled 9% on Q4 revenue guidance roughly in line with expectations. The negative reactions signal high bars and could weigh on related names.
Broadcom $63B financing deal and Anthropic IPO filing lift AI trade
Broadcom announced a group of banks would provide $63 billion in financing to buy its chips and networking solutions to be leased to Anthropic, sending AVGO up 4% and lifting AMD and Micron. Separately, Anthropic's highly anticipated IPO filing boosted AI-infrastructure sentiment, extending a risk-on breadth day across the AI cluster. Continued momentum supports semis and AI-infrastructure names near term.