The global stock market experienced a strong finish to the week, bolstered by moderating inflation data and anticipation surrounding key economic events. Investors eyed the Federal Reserve’s upcoming interest rate decision, set for Wednesday, alongside a busy earnings calendar featuring tech giants like Microsoft, Amazon, and Apple. The Consumer Price Index (CPI) report, released after a government shutdown, showed inflation remaining at 3% for September, a tenth of a percent lower than expected. Core inflation, excluding volatile food and energy prices, also rose by 3% in September, signaling a cooling trend despite rising by 0.2% monthly. This data offered confidence to the Federal Reserve, which had previously indicated a willingness to cut interest rates.
The anticipation surrounding the Fed’s decision continued to shape market sentiment. Street analysts and economists widely forecast another quarter-point interest rate reduction, with probabilities nearing 98%. However, the absence of the September jobs report, delayed due to the government shutdown, created uncertainty. While the market anticipated a rate cut, the lack of fresh labor market data added a degree of cautiousness. Bank of America analysts noted that the job market was holding steady at best and deteriorating at worst due to the delayed report. Furthermore, the shutdown’s impact extended to employment claims, though the situation remained fluid.
The week’s economic calendar was exceptionally packed, with numerous companies announcing their quarterly earnings. Tech giants, including Microsoft, Alphabet, Meta, Apple, and Amazon, were central to investor attention, with analysts scrutinizing their performance against lofty expectations fueled by the artificial intelligence boom. The potential for these companies to maintain their robust growth trajectory was a key driver of market optimism. Beyond tech, the energy sector also featured prominently, with Exxon Mobil, Chevron, Shell, and TotalEnergies reporting results, alongside UnitedHealth Group, Verizon, and Southern Company.
Geopolitical events also played a role, particularly the upcoming meeting between President Trump and China’s President Xi Jinping, scheduled to take place on the sidelines of the Asia-Pacific Economic Cooperation (APEC) Summit in South Korea. The meeting offered a chance to address ongoing trade disputes and tariffs. Treasury Secretary Scott Batterson expressed optimism about a “very substantial framework” emerging, anticipating China’s resumption of soybean purchases and a delay in export controls for rare earths. Simultaneously, the Trump administration continued to take action against Russian energy companies, Rosneft and Lukoil, seeking leverage in discussions regarding the Ukraine conflict.
Despite these complex dynamics, the market displayed resilience, driven by positive economic indicators and the expectation of monetary policy easing. The week’s closure saw significant gains across major indices, reflecting investor confidence in the US economy and the likelihood of further interest rate reductions. Furthermore, President Trump signed a flurry of trade deals with Southeast Asian partners, including Malaysia, Cambodia, Thailand, and others, solidifying the US’s commitment to fostering economic relationships in the region. Trading remains closely monitored as investors await the Fed’s decision and the unfolding of upcoming economic data releases.