U.S. stock futures were subdued on Thursday as investors navigated a flood of global developments — from the Federal Reserve’s latest rate cut to a high-profile meeting between Donald Trump and Xi Jinping, and a series of major tech earnings that underscored the industry’s multibillion-dollar push into artificial intelligence.
Futures drift amid global news flow
By 03:43 ET, Dow futures slipped 26 points (0.1%), S&P 500 futures were flat, and Nasdaq 100 futures edged down 12 points (0.1%).
The mixed tone followed a choppy Wall Street session on Wednesday, where the Dow Jones Industrial Average closed 0.2% lower, the S&P 500 was unchanged, and the Nasdaq Composite rose 0.6%, supported by Nvidia’s (NASDAQ:NVDA) record-breaking rally that pushed its valuation to $5 trillion — the first company to reach that milestone.
Investors also parsed a fresh batch of corporate earnings, including a strong performance from Caterpillar (NYSE:CAT), whose shares jumped 11.6% after reporting results that beat expectations.
Fed cuts rates, signals caution ahead
As expected, the Federal Reserve lowered interest rates by 25 basis points to a range of 3.75%–4.00% on Wednesday, marking its third reduction this year. The move came amid limited economic data due to the ongoing federal government shutdown, leaving the policy outlook uncertain.
The decision revealed divisions among policymakers. Fed Governor Stephen Miran, appointed by President Trump, advocated a larger 50-basis-point cut, while Kansas City Fed President Jeffery Schmid voted to keep rates unchanged.
At his press conference, Fed Chair Jerome Powell warned that another rate cut was “far from” certain at the December meeting. Following his remarks, traders trimmed expectations for another cut to 71%, down from 90% earlier.
Powell also confirmed the end of quantitative tightening, saying the Fed would stop reducing its holdings of Treasuries and mortgage-backed securities due to signs of strain in short-term funding markets.
Elsewhere, the Bank of Japan kept its policy settings unchanged but maintained that it would continue raising rates if economic conditions align with its forecasts. The European Central Bank is also expected to hold rates steady, supported by easing inflation and steady growth, even as uncertainty over U.S. trade policy persists.
Trump and Xi hold rare in-person talks
Trade policy was back in focus as Donald Trump and Xi Jinping met in Busan, South Korea, for their first face-to-face meeting in six years. Trump called the conversation “amazing”, adding that the U.S. would lower tariffs on Chinese goods immediately.
In exchange, Beijing agreed to crack down on fentanyl chemical exports and to pause restrictions on rare earth minerals — a key sector for electric vehicles and semiconductors. Trump said China would also begin buying “tremendous amounts” of U.S. *soybeans and other agricultural products “starting immediately.”
The Chinese Commerce Ministry later confirmed that the pause on rare earth controls would last one year and that both sides had reached a consensus on fentanyl cooperation and agriculture trade.
Trump clarified that Nvidia’s Blackwell AI chip was not discussed, despite earlier speculation. He noted instead that the company’s future in China, a $50 billion market, would depend on its own business decisions.
Following the 90-minute meeting, markets were quiet. Analysts at Vital Knowledge commented that “the deliverables don’t really alter the status quo” in U.S.-China trade relations.
Big Tech results dominate investor focus
Earnings from Meta Platforms (NASDAQ:META), Alphabet (NASDAQ:GOOG), and Microsoft (NASDAQ:MSFT) were among the key market drivers overnight, with investors looking ahead to Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN) results later in the day.
Meta shares plunged over 7% after-hours after the company said it would “aggressively” ramp up spending on artificial intelligence capable of surpassing human intelligence. The news raised concerns about the scale and returns of its massive AI investments. The company also reported a miss on net income due to a tax charge tied to Trump’s budget bill, even as revenue hit a new record.
Alphabet reported record-high revenue and a 33% surge in net profit to $35 billion, driven by strength in cloud computing and digital advertising. The company’s shares rose 7% after-hours.
Microsoft also benefited from strong demand for cloud and AI services, announcing plans to double its data center capacity within two years. However, it warned that AI spending this year would exceed previous expectations, pushing shares 2% lower after-hours.
The flood of AI-related investments has sparked renewed debate among analysts about a possible tech valuation bubble, reminiscent of the dot-com era.
OpenAI reportedly planning $1 trillion IPO
According to Reuters, OpenAI is preparing for a 2027 initial public offering that could value the company at up to $1 trillion, making it potentially the largest IPO in history.
The company aims to raise at least $60 billion from the listing, with an official filing expected in the second half of 2026. The offering would provide CEO Sam Altman with significant capital to advance his long-term AI ambitions.
Known for its ChatGPT platform, OpenAI is investing hundreds of billions of dollars in AI chips and infrastructure to pursue artificial general intelligence — systems comparable to human cognition. Earlier this week, the company also reached an agreement with Microsoft, its top investor, enabling it to transition to a for-profit structure.
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