Author: Fiona Craig

U.S. stock futures signaled a positive open on Wednesday, with Wall Street poised to build on its recent strength as investors bet on another interest rate cut from the Federal Reserve and continued momentum from the tech sector.

Nvidia (NASDAQ:NVDA) once again looks to be at the center of the action. The AI chipmaker’s shares climbed 3.6% in pre-market trading, extending Tuesday’s 5% surge that followed news of several major partnerships — including a $1 billion investment in Nokia (NYSE:NOK) as part of a strategic collaboration on networking and AI infrastructure. The rally has brought Nvidia closer to an unprecedented $5 trillion market capitalization, a milestone no company has yet achieved.

Optimism is also being fueled by expectations for the Fed’s policy announcement later today. The central bank is widely expected to trim rates by another quarter percentage point, and traders will parse both the accompanying statement and comments from Chair Jerome Powell for hints about the outlook for further easing through year-end.

Data from CME Group’s FedWatch Tool shows that markets assign an 87% probability to an additional 25-basis-point rate cut in December, though sentiment about more cuts early next year remains mixed.

On Tuesday, U.S. equities maintained their upward bias despite some intraday swings. The Nasdaq Composite rose 0.8% to 23,827.49, the Dow Jones Industrial Average added 0.3% to 47,706.37, and the S&P 500 edged up 0.2% to 6,890.89 — each closing at or near record highs for a second straight day.

The market’s ongoing strength has been underpinned by renewed optimism surrounding U.S.–China trade discussions, bolstered by reports of a new rare-metals agreement between the U.S. and Japan ahead of President Donald Trump’s scheduled meeting with Chinese President Xi Jinping later this week.

Still, many investors appear hesitant to take large new positions before the Fed delivers its policy guidance, preferring to wait for more clarity on the direction of interest rates.

Attention is also turning to a busy stretch of earnings from the U.S. technology giants, with Alphabet (NASDAQ:GOOGL), Apple (NASDAQ:AAPL), Meta Platforms (NASDAQ:META), Microsoft (NASDAQ:MSFT), and Amazon (NASDAQ:AMZN) all set to release quarterly results in the days ahead.

In economic updates, the Conference Board reported a modest decline in U.S. consumer confidence in October, with its index falling to 94.6 from a revised 95.6 in September, slightly better than economists’ expectations.

Sector-wise, networking and steel stocks led gains on Tuesday, with the NYSE Arca Networking Index and NYSE Arca Steel Index both advancing 1.6% to new highs. By contrast, airline shares dropped sharply, sending the NYSE Arca Airline Index down 4.1%, while utilities, commercial real estate, and energy stocks lagged behind.

With momentum still strong and AI-related enthusiasm running high, investors appear ready to extend Wall Street’s winning streak — even as the Federal Reserve’s message later today could test the market’s resilience.

European equities advanced on Wednesday, buoyed by a mix of upbeat corporate earnings and investor anticipation ahead of the U.S. Federal Reserve’s interest rate decision later in the day, where a quarter-point cut is already seen as a done deal.

London’s FTSE 100 led regional gains, rising 0.9%, while Germany’s DAX and France’s CAC 40 each added around 0.1%, reflecting a generally positive but cautious tone across major markets.

Swiss technology firm Logitech International (BIT:1LOGN) was among the day’s standout performers after reporting stronger fiscal second-quarter 2026 results that topped analyst forecasts.

Shares of ASM International (EU:ASM), the Dutch manufacturer of semiconductor production equipment, also traded higher despite third-quarter bookings coming in below expectations, suggesting resilience amid sectoral headwinds.

Mercedes-Benz (TG:MBG) climbed sharply after reaffirming its full-year outlook and unveiling a €2 billion ($2.3 billion) share repurchase program. The automaker’s third-quarter earnings comfortably exceeded projections, underscoring robust demand for its premium vehicles.

Deutsche Bank (TG:DBK) gained ground as well, following an unexpected 7% rise in quarterly profit — a surprise beat that countered expectations of a decline and highlighted solid performance in its core businesses.

Chemical giant BASF (TG:BAS) added to the upbeat tone, advancing after reporting adjusted operating earnings that slightly surpassed market forecasts.

In contrast, Swedish bearings producer SKF (BIT:1SKFB) moved lower as its third-quarter sales and adjusted operating profit largely met analyst expectations, offering little to excite investors.

Overall, the regional mood remained cautiously optimistic, with traders balancing strong European earnings updates against the prospect of fresh monetary policy guidance from the Fed later today.

The U.S. dollar strengthened on Wednesday, lifted by renewed optimism over progress in U.S.-China trade talks, while traders looked ahead to the Federal Reserve’s upcoming policy announcement later in the day.

At 09:20 GMT, the U.S. Dollar Index, which tracks the greenback against six major currencies, was up 0.3% at 98.787, recovering after two consecutive sessions of declines.

Trade optimism supports dollar

U.S. President Donald Trump continued his Asia tour, arriving in South Korea, where he is scheduled to meet with Chinese President Xi Jinping on Thursday.
Market sentiment improved after Trump said he believed the two sides would reach a “great deal”, signaling optimism for a possible easing in trade tensions between the world’s two largest economies.

Trump suggested the agreement could involve reducing tariffs on Chinese imports in exchange for Beijing’s commitment to halt exports of fentanyl precursor chemicals.
He also noted he may discuss Nvidia’s (NASDAQ:NVDA) advanced Blackwell AI chips with Xi, referring to ongoing U.S. export restrictions on cutting-edge semiconductors — a key sticking point in trade relations.

Still, gains for the dollar were limited as traders awaited the Fed’s widely expected 25-basis-point rate cut later in the session. Markets are also seeking guidance from Fed Chair Jerome Powell on whether additional rate cuts could follow in the coming months amid signs of labor market softening.

“The ingredients for another ‘buy the rumor, sell the fact’ dollar rally are all there,” said analysts at ING. “So, while risks are slightly tilted to the upside for USD today, any rally should be smaller and shorter-lived than in September. The likely announcement of the end of QT could also limit USD upside.”

Euro softens ahead of ECB meeting

The euro edged lower, with EUR/USD down 0.2% to 1.1623, ahead of Thursday’s European Central Bank policy meeting. The ECB is widely expected to keep rates unchanged.

“The implications for EUR/USD are likely to be limited, and today’s FOMC should be the only input – if anything – for direction in the pair,” ING added. “We see some modest upside risks for the USD. That may not be enough to take EUR/USD sustainably below 1.160, though, and the short-term outlook for the pair remains neutral.”

Elsewhere, GBP/USD slipped 0.5% to 1.3202, while USD/CAD was steady at 1.3947 ahead of the Bank of Canada’s rate decision later in the session.
“Markets are largely pricing in a cut, but it will be hard for the BoC to shut the door to more easing given the worsening trade picture,” ING said.

Yen near 8-month lows before BOJ decision

In Asia, the yen hovered near its weakest levels in eight months, with USD/JPY up 0.1% at 152.24, as markets bet that the Bank of Japan will maintain its ultra-loose policy stance when it meets on Thursday.

The BOJ is expected to hold rates steady as it navigates expectations for looser fiscal policy under newly elected Prime Minister Sanae Takaichi. Her election has weighed on the yen, as investors anticipate increased government spending and resistance to tighter monetary conditions.

The Chinese yuan (USD/CNY) traded slightly higher at 7.0995, with traders awaiting Thursday’s Trump-Xi meeting, expected to yield progress toward de-escalating trade tensions. Trump told reporters he was open to lowering fentanyl-related tariffs on China and planned to discuss rare earths and AI chips, including those made by Nvidia.

Meanwhile, the Australian dollar climbed 0.4% to 0.6611, hitting a near three-week high, after hotter-than-expected inflation data reduced expectations for additional rate cuts by the Reserve Bank of Australia.

U.S. stock futures traded mixed early Wednesday as investors braced for a series of major market catalysts — from the Federal Reserve’s interest rate decision to earnings from the world’s biggest tech companies, while geopolitical attention turned to President Donald Trump’s trip to South Korea ahead of a potential meeting with China’s Xi Jinping.

At 03:38 ET, Dow futures edged down 31 points (–0.1%), while S&P 500 futures gained 17 points (+0.2%) and Nasdaq 100 futures climbed 113 points (+0.4%). On Tuesday, Wall Street’s main indexes closed at record highs for the third straight session, buoyed by optimism around artificial intelligence and upcoming policy easing.

Nvidia fuels rally, AI frenzy intensifies

The latest boost came from Nvidia (NASDAQ:NVDA), which revealed $500 billion in AI chip bookings and a deal to build seven new supercomputers for the U.S. Department of Energy. Shares surged nearly 5%, briefly bringing the company close to the $5 trillion valuation mark, reinforcing its status as a barometer for both AI enthusiasm and overall market sentiment.

Tech earnings dominate the spotlight

The earnings spotlight now shifts to other tech giants. Microsoft (NASDAQ:MSFT), Meta Platforms (NASDAQ:META), and Alphabet (NASDAQ:GOOG) are set to release their quarterly results after the closing bell, followed later this week by Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN).

Given their sheer market size, these companies’ results are expected to heavily influence U.S. equity momentum into year-end. Investors will focus on updates about AI-related spending plans, as the competition to develop and monetize artificial intelligence continues to escalate across Silicon Valley.

Fed rate cut expected — focus on Powell’s tone

The Federal Reserve concludes its two-day meeting later today, with markets fully pricing in a 25-basis-point rate cut, bringing rates down to the 3.75%–4.00% range. However, attention will center on Chair Jerome Powell’s commentary, particularly on whether another rate reduction might follow in December.

The Federal Open Market Committee (FOMC) faces a delicate balance between supporting growth and keeping inflation in check. While inflation data for September showed only a moderate uptick, the U.S. government shutdown has deprived policymakers of fresh labor data, forcing them to rely on alternative economic indicators.

The Fed’s recent pivot toward monetary easing came after signs of slowing employment growth — a trend that could be reinforced if Powell adopts a dovish tone later today.

Trump’s diplomatic push in South Korea

Amid the macro focus, investors are also monitoring President Trump’s visit to Asia, which could impact trade relations between Washington and Beijing.

Trump arrived in Gyeongju, South Korea, where he met President Lee Jae Myung and hinted at progress toward a trade agreement with Seoul, though officials downplayed immediate breakthroughs.

A meeting between Trump and Chinese President Xi Jinping is expected Thursday in Busan, with discussions likely centered on tariffs and fentanyl export controls. Trump has suggested that a potential deal could include reduced U.S. levies on China in exchange for Beijing’s commitment to halt the export of fentanyl precursor chemicals.

Trump also indicated plans to discuss Nvidia’s advanced Blackwell AI chips with Xi — a sensitive topic, given U.S. export restrictions preventing sales of top-end AI processors to China.

Gold rebounds as traders weigh Fed and trade signals

In commodities, gold prices rebounded above the $4,000 per ounce level after two sessions of steep losses.

Spot gold rose 1.5% to $4,010.15, while U.S. gold futures gained 1.0% to $4,023.84. The metal had fallen to its lowest level since early October amid optimism over U.S.-China trade progress.

Expectations for lower U.S. interest rates, however, helped restore some demand for the non-yielding asset. A dovish Fed stance could support gold further, though hawkish signals or stronger dollar movements may limit gains.

European stock markets traded mostly flat on Wednesday as investors awaited the Federal Reserve’s interest rate decision and continued to digest a heavy flow of corporate earnings from both sides of the Atlantic.

By 08:05 GMT, Germany’s DAX edged down 0.1%, France’s CAC 40 slipped 0.2%, while London’s FTSE 100 gained 0.4%, buoyed by strength in financial and energy shares.

Fed poised for a 25-basis-point cut

The U.S. central bank will conclude its two-day policy meeting later today, with markets almost fully expecting a 25-basis-point rate cut, bringing the federal funds rate to a range of 3.75%-4.00%.

According to the CME FedWatch Tool, traders are pricing in a 96% probability of such a move. With the ongoing U.S. government shutdown limiting access to fresh economic data, investors will closely analyze Chair Jerome Powell’s remarks for clues on future policy direction and the Fed’s view of the economy.

Attention will also turn to whether the central bank hints at ending its quantitative tightening program, which has gradually reduced its balance sheet since 2022.

U.S.-China trade tone softens

Geopolitical sentiment improved after U.S. President Donald Trump said he plans to reduce tariffs on Chinese imports linked to fentanyl precursors, ahead of his meeting with President Xi Jinping in South Korea on Thursday.

The two leaders are expected to discuss ways to de-escalate trade tensions, which have weighed on global markets this year. Trump also mentioned that he intends to bring up Nvidia’s (NASDAQ:NVDA) artificial intelligence chip Blackwell during the meeting.

Corporate earnings in focus

Markets are also bracing for another wave of major U.S. tech results, with Alphabet (NASDAQ:GOOGL), Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) all scheduled to report after Wall Street’s close. Expectations remain high for these companies to justify their elevated valuations.

In Europe, UBS (NYSE:UBS) reported a 74% jump in third-quarter net profit, far exceeding forecasts, as strong trading activity and renewed M&A deals lifted revenue.

Deutsche Bank (TG:DBK) posted an 8% increase in quarterly pre-tax profit, supported by higher trading income and cost controls, while Santander (LSE:BNC) announced a 7.8% rise in profit year-on-year, citing solid U.S. operations that offset softer results in Brazil.

Meanwhile, Mercedes-Benz (TG:MBG) saw its operating profit tumble by more than two-thirds due to restructuring costs and fierce competition, particularly in the U.S. and China. Adidas (TG:ADS) also disappointed, with North American sales showing the weakest regional growth.

In the energy sector, Equinor (TG:DNQ) posted a 9.9% decline in quarterly profit, slightly worse than expected, as lower oil and gas prices weighed on results, though the company maintained its full-year production guidance.

GSK (LSE:GSK) raised its 2025 sales forecast, boosted by double-digit growth in HIV and oncology treatments during the third quarter.

Oil stabilizes after U.S. inventory draw

Crude prices steadied after two sessions of losses, supported by data showing a surprise draw in U.S. inventories.

Brent futures slipped 0.1% to $63.76 per barrel, while West Texas Intermediate traded nearly flat at $60.14.

According to the American Petroleum Institute, U.S. crude stocks fell by over 4 million barrels in the week ending October 24, while gasoline inventories declined by 6.35 million barrels.

The larger-than-expected inventory draw helped lift sentiment after earlier pressure from reports suggesting OPEC+ may consider a production increase in December.

Gold prices traded steady but near recent lows on Wednesday in Asia, as easing trade tensions and expectations of a Federal Reserve interest rate cut later in the day kept investors cautious.

At 01:40 ET (05:40 GMT), spot gold inched up 0.2% to $3,957.42 per ounce, while U.S. gold futures slipped 0.1% to $3,977.76. The metal has fallen sharply over the past two sessions, hitting its weakest level since early October.

Fed policy meeting in focus; Trump’s Asia tour draws attention

The Federal Reserve is set to conclude its two-day policy meeting later Wednesday, with markets widely expecting a 25-basis-point rate cut.

Although rate cuts typically support non-yielding assets like gold, investors are more focused on the central bank’s forward guidance. If Fed Chair Jerome Powell signals that future easing could be delayed—or if inflation risks remain elevated—gold could face renewed pressure from rising real yields or a stronger U.S. dollar.

Trade optimism dampens safe-haven demand

Gold’s recent weakness has also been tied to signs of progress in U.S.-China trade relations. Reports of a framework agreement on tariffs and rare-earth export controls have lifted hopes of de-escalation.

Additionally, U.S. President Donald Trump said he expects to reduce the 20% tariff on Chinese imports linked to fentanyl precursor chemicals ahead of his planned summit with Chinese President Xi Jinping in South Korea on Thursday.

Following a stop in Tokyo, Trump arrived in Gyeongju, South Korea, on Wednesday for a meeting with South Korean President Lee Jae Myung.

These developments have reduced market anxiety around trade and geopolitics, softening demand for traditional safe-haven assets such as gold and contributing to the recent pullback from record highs.

Broader metals market remains muted

Trading across the metals complex was subdued ahead of the Fed announcement. Silver futures rose 0.3% to $47.45 per ounce, while platinum futures slipped 0.6% to $1,575.80.

On the industrial side, benchmark copper futures on the London Metal Exchange gained 0.2% to $11,053.20 per ton, and U.S. copper futures were up 0.3% to $5.18 per pound.

Market participants remain on edge as they await the Fed’s comments for clues on the direction of monetary policy, which could determine whether gold continues to drift lower or finds renewed support in the weeks ahead.

Oil prices edged higher on Wednesday, supported by a sharper-than-expected drop in U.S. crude inventories and renewed optimism surrounding an upcoming meeting between the leaders of the United States and China — the world’s two largest energy consumers.

At 07:45 GMT, Brent crude futures rose 22 cents, or 0.34%, to $64.62 per barrel, while U.S. West Texas Intermediate (WTI) gained 20 cents, or 0.33%, to $60.35 per barrel.

China’s Foreign Ministry confirmed that President Xi Jinping will meet U.S. President Donald Trump on Thursday in Busan, South Korea, stating that the discussion would “inject new momentum into the development of U.S.-China relations” and that Beijing was prepared to work with Washington for “positive outcomes.”

Beijing also said it remained open to further cooperation on controlling fentanyl exports, following remarks from Trump that he could reduce tariffs on Chinese goods in exchange for tighter controls on the precursor chemicals used to make the drug.

Meanwhile, data from the American Petroleum Institute (API) showed a notable drawdown in U.S. crude, gasoline, and distillate inventories for the week ending October 24. Crude stockpiles reportedly fell by 4.02 million barrels, gasoline inventories by 6.35 million barrels, and distillates by 4.36 million barrels.

The steeper-than-expected inventory declines prompted a price rally in the previous session and continued to provide support in early Wednesday trading.

“The surprise draws on inventory in the U.S. helped prices this morning, but the interplay of sanctions risks and OPEC+’s posture is driving markets,” said Priyanka Sachdeva, senior market analyst at Phillip Nova.

“That doesn’t mean the rally has unlimited upside. Because while the sanctions/supply story has been built up, the demand side still shows softness and spare capacity remains,” she added.

Last week, both Brent and WTI posted their largest weekly gains since June after Trump introduced Ukraine-related sanctions on Russia, targeting energy majors Lukoil and Rosneft.

However, lingering doubts over whether sanctions would sufficiently tighten supply — coupled with speculation that OPEC+ could raise output — weighed on prices in the previous session, when both benchmarks slipped by nearly 1.9%, or more than $1 per barrel.

On Tuesday, the Kremlin reiterated that Russia continued to offer “top-quality energy at a good price,” leaving its trade partners free to decide whether to continue purchases following the U.S. measures.

Industry sources said that several Indian refiners have paused new orders for Russian crude pending government guidance, with some turning to the spot market for alternative supplies. Still, state-run Indian Oil affirmed on Tuesday that it “would not stop buying Russian oil as long as it was complying with sanctions.”

Germany’s economy minister said the U.S. government had provided written assurances that Rosneft’s German assets would remain exempt from sanctions, given that the company no longer holds control over them.

Within OPEC+, the world’s leading coalition of oil-producing countries, discussions are reportedly leaning toward a modest output increase in December, with two sources suggesting a possible boost of around 137,000 barrels per day, according to individuals familiar with the matter.

Separately, the CEO of Saudi Aramco noted that global crude demand “was strong even before sanctions were imposed on Russian oil majors” and emphasized that “Chinese demand was still healthy,” reinforcing optimism in the broader energy market.

Banco Santander S.A. (LSE:BNC) reported third-quarter results that modestly exceeded market forecasts, supported by lower provisions and stable contributions from its main geographic segments. Shares were little changed following the release.

The Spanish lender posted a net profit of €3.5 billion, coming in about 1% above analyst expectations. Revenue was broadly consistent with projections, down 1.3% quarter-on-quarter, while pre-provision operating profit edged 1% above estimates. Operating costs fell 1%, and provisions were 6% below forecasts from both Morgan Stanley and the broader market.

Morgan Stanley described the outcome as “an in-line set of results at a group level.” The brokerage noted that net interest income was slightly softer—0.3% below consensus—mainly due to weakness in Argentina, while fee income exceeded expectations by 1%.

Santander also recognized a €181 million legal provision at its corporate center related to ongoing legal matters in the UK. According to Morgan Stanley, the impact “was offset by lower taxes and profit was in-line.”

The bank’s CET1 capital ratio improved to 13.1%, up 10 basis points from the prior quarter, despite minor model and market headwinds.

In Spain, net interest income rose 1.3% quarter-on-quarter, “3% better than expected, with provisions also 12% lower,” according to Morgan Stanley. Spanish net profit reached €975 million, about 10% below expectations, affected by weaker trading and restructuring charges.

In the UK, Santander reported €398 million in profit, exceeding the €322 million estimate. Net interest income remained stable in pounds, while fees rose 4% and costs declined 4%.

The U.S. division posted a 2% increase in pre-provision operating profit, driven by 4% growth in net interest income and 5% higher fees. Provisions met expectations, but a higher tax rate led to an 8% drop in profit.

In Brazil, net interest income slipped 2% in local currency, in line with consensus. Pre-provision profit was 6% below forecasts due to softer trading and fees, though lower costs and taxes pushed net profit up to €593 million, 5% ahead of expectations.

Morgan Stanley commented that “revenue performance in Spain, and the US, with no asset quality issues uncovered in the US and Brazil which were a concern into the quarter, should come as somewhat of a relief.”

Santander reaffirmed its 2025 return on tangible equity (ROTE) target of around 16.5% after Additional Tier 1 instruments, based on a tangible book value of €82.4 billion. This implies full-year profit of approximately €13.5 billion, or 3% above Morgan Stanley’s forecast. As the brokerage summarized, “guidance of 16.5% ROTE post AT1s maintained, implies c. €13.5bn profits for the full year, 3% above MSe.”

The UK Competition and Markets Authority (CMA) has approved the proposed merger between Primary Health Properties PLC (LSE:PHP) and Assura PLC (USOTC:ARSSF), allowing the deal to move forward without a Phase 2 investigation.

In its decision, the CMA stated that, based on the evidence reviewed, the merger does not raise competition concerns that would warrant a deeper inquiry. This regulatory clearance represents a key milestone in the transaction, removing one of the final barriers to completion.

The merger between the two UK healthcare property specialists is expected to create a leading real estate investment trust (REIT) focused on modern primary care facilities, strengthening their combined market position and operational efficiencies.

More about Primary Health Properties PLC and Assura PLC

Primary Health Properties PLC is a real estate investment company specializing in the ownership and management of healthcare properties leased primarily to the NHS and other healthcare providers across the UK and Ireland.

Assura PLC operates in a similar space, developing and managing community healthcare buildings that support the delivery of frontline medical services. The merger aims to enhance portfolio scale, improve capital efficiency, and accelerate investment in healthcare infrastructure across the UK.

GSK (LSE:GSK) delivered a robust third-quarter 2025 performance, with sales rising to £8.5 billion, fueled by strong demand across its specialty medicines, vaccines, and general medicines divisions. The company raised its full-year guidance, now expecting turnover growth of 6–7%, core operating profit growth of 9–11%, and core EPS growth of 10–12%.

The results were driven by double-digit gains in respiratory, oncology, and HIV treatments, reflecting GSK’s focus on innovation and expansion in high-growth therapeutic areas. The company also benefited from continued momentum in its vaccine portfolio, including products for meningitis and shingles.

During the quarter, GSK secured four new product approvals and reported progress in multiple late-stage clinical trials, positioning it for future growth. CEO Emma Walmsley highlighted that ongoing investments in R&D and pipeline development are “building sustainable long-term value for patients and shareholders alike.”

In line with its capital return strategy, GSK declared a dividend and continued its share buyback program, emphasizing its commitment to shareholder returns.

More about GlaxoSmithKline plc

GlaxoSmithKline plc (GSK) is a global biopharmaceutical company focused on developing and manufacturing specialty medicines and vaccines that address major diseases. Its core therapeutic areas include respiratory, oncology, immunology, and HIV, complemented by a leading vaccine portfolio. Headquartered in London, GSK operates worldwide with a mission to unite science, technology, and talent to get ahead of disease together.