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Markets Split as Fed Caution Collides With AI Surge and Earnings Volatility

Investors weigh an uncertain path to further rate cuts against sharp moves in mega-cap tech.

Overview

  • After a 25 bp cut to 3.75%–4.00%, Jerome Powell said a December reduction is not assured as officials aired differing views, and 10-year Treasury yields edged to roughly 4.07%–4.10%.
  • The Dow slipped, the S&P 500 was flat, and the Nasdaq notched a record close, helped by Nvidia becoming the first company to top $5 trillion in market value.
  • Tech results drove wide swings as Meta fell roughly 11%–12% on a sharp profit drop and heavier AI spending, Alphabet rose on stronger cloud-fueled earnings, and Microsoft eased despite beating forecasts.
  • ParisCAC 40 fell 0.53% with banks retreating despite higher quarterly profits, Stellantis dropped 8.75% after warning of additional charges, and Airbus gained on a double-digit profit increase.
  • U.S.–China talks in South Korea produced announcements on rare earths, soy and certain tariff issues related to fentanyl, a development that supported risk appetite alongside ongoing AI optimism.