Markets
Stocks rose last week as trade developments, positive Q3 corporate results, and momentum in megacap tech drove another rally, despite some cautious comments from the Fed.
The Standard & Poor’s 500 Index gained 0.71 percent, while the tech-heavy Nasdaq Composite Index picked up 2.24 percent. The Dow Jones Industrial Average rose 0.75 percent. By contrast, the MSCI EAFE Index, which tracks developed overseas stock markets, fell 0.55 percent.1,2
Stocks Up for Third Straight Week
Stocks rose over the first half of the week on news that Chinese and U.S. officials were working on a trade deal. Meanwhile, a rise in AI-related tech names lifted the broader market ahead of the Federal Open Market Committee (FOMC) meeting. All three major averages notched record closing highs for the first two days of the week, including the S&P 500 closing above 6800 for the first time.3,4
Stocks continued their rise Wednesday morning as the AI trade continued to fuel momentum. But markets wobbled following the FOMC’s decision to cut interest rates by a quarter percentage point. Chair Powell’s comments that the Fed may not adjust rates in December cut short the market’s rally.5,6
Stocks bounced out of the gate on Friday, with the Nasdaq leading gains for all three major averages as several megacap tech companies rallied on upbeat Q3 results and other corporate news.7
‘Not a Foregone Conclusion’
As widely expected, the Federal Reserve cut short-term interest rates by 0.25 percent. But as often happens for those trying to read the Fed tea leaves, it was the finer messaging points that moved the markets.
Fed Chair Jerome Powell said in his post-meeting press conference that another rate adjustment in December was “not a foregone conclusion.” He added that Fed policy is “not on a pre-set course.” Part of that, he said, was due to the ongoing government shutdown and the resulting dearth of economic data—and the challenge in setting monetary policy without ongoing reports.8
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