Fed expected to hold rates; Warsh guidance in focus
The FOMC concludes its two-day meeting Wednesday with rates widely expected held at 3.75%-4.0% (over 90% priced per CME FedWatch). Markets see roughly an 80% probability of a December hike, so Chair Kevin Warsh's press conference guidance on December and inflation will drive the immediate rate-sensitive reaction across equities and Treasuries.
Alphabet and Microsoft report Wednesday and Amazon Thursday, alongside roughly one-third of the S&P 500 this week. With the AI trade under pressure and two straight weeks of tech-led losses, investor focus on capex intensity, cash flow and ROI rather than EPS beats makes these results a key swing factor for broad index direction.
Significant Geopolitical Events with US Economic Impact
Oil above $100 on Saudi attack, Iran tensions
Brent and WTI remain elevated above $114 and $101 respectively after Houthi attacks on Saudi energy infrastructure and reports of possible renewed US-Iran strikes, though prices eased Monday on Qatari mediation. Sustained high crude feeds the inflation narrative, pressuring the Fed's easing path and rate-sensitive equities.
The PCE price index, the Fed's preferred inflation gauge, is released Thursday, with Q3 GDP also due this week along with ADP employment, durable goods and jobless claims. Sticky inflation above the 2% target could reinforce December hike expectations and pressure equities and Treasuries.
Shares of Nebius, CoreWeave and Iren fell more than 4% in premarket trade after Elon Musk said more than 200 companies in the neocloud sector could collapse. The comment amplifies existing doubts over AI infrastructure spending returns and could extend selling pressure across AI-linked names.