The official explanation is that this is an act of risk management: a polite way of saying "we're not sure what's going on, but best not to crash". After two years of raising rates to choke off inflation, the Fed now faces the opposite problem: growth is cooling, hiring is slowing, and consumer confidence is losing its fizz. Inflation, which haunted investors and central bankers alike, has retreated, though it's still lurking in the cupboard. A small, pre-emptive cut in rates, likely 0.25%, is meant to loosen things up a little without letting prices run wild again.

With no fresh job or spending figures to rely on, Powell's decision, due early this afternoon, will rest on hunches, models, and the occasional whisper from business leaders. But inaction carries its own risks. Markets are positively giddy: AI profits, corporate dealmaking, and the promise of endless technological breakthroughs have sent investors into something close to euphoria.

The Nasdaq keeps floating higher. Microsoft and Nvidia continue to break records, cheered on by investors who see AI not just as a new industry but as a new religion. Their faith may yet be tested. Some companies are soaring, others stumbling. Stride dropped 37%  after a bungled upgrade.

America's corporate landscape now looks split in two. The big winners - tech titans, a few industrial champions, and oil producers - are minting money. But many consumer brands are struggling as shoppers pull back. Mondelez just trimmed its forecasts, suggesting chocolate and biscuits may be recession-proof only up to a point. The next wave of earnings, from the likes of Alphabet, Meta, and Boeing, will reveal whether optimism can still survive higher borrowing costs and thinning wallets.

For now, Wall Street is in a chipper mood. Nvidia, the poster child of the artificial intelligence boom, is now flirting with a $5 trillion valuation, a milestone once reserved for entire national economies, not GPU manufacturers. CEO Jensen Huang has unveiled $500 billion in new AI chip orders and plans for seven government supercomputers. Investors, ever fond of a good story, have duly piled in.

The enthusiasm is infectious. Apple briefly brushed $4 trillion this week, while Microsoft sails comfortably above it. The S&P 500 and Nasdaq continue to clock record highs, powered by the intoxicating mix of AI optimism, solid earnings and a Federal Reserve that looks ready to loosen its grip on interest rates.

Still, one can't help wondering whether Wall Street's exuberance has drifted a little ahead of reality. Nvidia's rise is breathtaking, but history rarely smiles on valuations built entirely on promise. For now, investors seem happy to believe the hype. However, I’m seeing more and more chatter drawing parallels with the internet bubble of the 1990s.

The rest of the world is hardly offering clarity. In Canada, policymakers are sitting tight, giving their currency a modest lift. In Australia, inflation has unexpectedly leapt higher, crushing any hope of a rate cut and sending markets tumbling. Europe, as usual, is muddling through: Spain's economy is slowing, although banks like Santander and UBS quietly pocketing solid profits. And in Asia, Japan's investments in U.S. manufacturing are being sold as "win-win" deals, though Washington seems far happier with the arrangement than Tokyo.

Donald Trump, meanwhile, is on a goodwill tour of Asia, dropping hints about a possible trade deal with China. Markets, ever eager for a good story, have taken him at his word, for now. But the president's promises have a habit of expiring fast. Any sign of friction could send the dollar spinning and traders running for cover.

Put together, it's a curious picture. Investors are betting that technology, diplomacy, and easy money will keep the good times rolling indefinitely. The Fed, for its part, is cutting rates not because it's confident, but because it's cautious. It's trying to soothe nerves before they fray.

For now, that may be enough. U.S. markets keep breaking records; Asia is largely upbeat (bar Australia's inflation hangover) and corporate America is still attracting billions in investment.

In Asia-Pacific, Japan's Nikkei 225 rebounded strongly by more than 2%, boosted by its technology stocks. South Korea's KOSPI gained 1.8% and Taiwan's TAIEX rose 1.2%. In Hong Kong, the Hang Seng stood out with a 0.3% decline. The sharpest decline came in Australia, with the ASX 200 down 1% after the announcement of much higher-than-expected inflation in September, which dashed hopes of an RBA rate cut in a week's time. Leading indicators are slightly bearish in Europe.

Today's economic highlights:

Today: in the United States, wholesale inventories, pending home sales, DOE crude oil inventories, and the FOMC rate decision (lower and upper bound) are on the agenda. See the full calendar here.

  • Dollar index: 98,882
  • Gold: $4,024
  • Crude Oil (BRENT): $63.92 (WTI) $60.15
  • United States 10 years: 3.98%
  • BITCOIN: $113,340

In corporate news:

  • TE Connectivity posted strong Q4 results with sales up 17% and adjusted EPS of $2.44, driven by robust AI and industrial demand, and guided for another strong quarter ahead.
  • Generac Holdings missed Q3 expectations with revenue of $1.11 billion and adjusted EPS of $1.83, both below analyst estimates.
  • Centene Corporation surprised with a Q3 adjusted profit of $0.50 per share versus an expected loss, helped by a lower tax rate, and beat revenue estimates at $49.69 billion.
  • Thermo Fisher is acquiring clinical trial software firm Clario for $8.875 billion in a deal expected to immediately boost earnings.
  • Apple is expected to report a strong holiday quarter, helped by high demand for the iPhone 17 Pro series despite delayed AI features.
  • Tesla faces backlash from unions and state pension leaders over Elon Musk's proposed $1 trillion pay deal, ahead of a critical shareholder vote.
  • OpenAI CEO Sam Altman unveiled a $1.4 trillion vision to massively expand AI infrastructure following a restructuring that may pave the way for an IPO.
  • Amazon's AWS confirmed a $5 billion AI data center investment in South Korea, marking the largest greenfield investment in the country's history and part of a $12.6 billion long-term expansion.
  • Lockheed Martin and Google Public Sector are collaborating to integrate generative AI into national security infrastructure.
  • Nvidia neared a $5 trillion valuation after CEO Jensen Huang announced massive chip orders and supercomputer projects, and is partnering with Palantir, Eli Lilly, and Foxconn to expand AI applications across healthcare, logistics, and manufacturing.
  • Visa raised its quarterly dividend by 14% and surpassed Q4 earnings expectations with EPS up 10% and revenue up 12% year over year.
  • Mondelez beat Q3 revenue expectations with a 5.9% increase but cut its annual EPS and growth forecasts due to cost inflation and unfavorable product mix.
  • Estee Lauder partnered with Shopify to modernize its digital commerce systems, with rollout starting in early 2026.
  • Teradyne exceeded Q3 earnings expectations due to strong AI-related demand in semiconductor testing.
  • Boyu Capital is leading the race to acquire a controlling stake in Starbucks' China business in a deal potentially worth over $4 billion.
  • Ford is recalling nearly 175,000 vehicles in the U.S. due to a moonroof defect that could increase crash risks.
  • IBM acquired Austria-based Txture to enhance its hybrid cloud offerings and IT modernization services.
  • Stellantis, Nvidia, Uber, and Foxconn are collaborating to develop autonomous robotaxis for deployment in select global cities.
  • Booking Holdings saw a 13% revenue increase in Q3, driven by strong U.S. travel demand and improved direct bookings.
  • OpenAI was sued by the original Cameo over trademark infringement related to its Sora app feature using the same name.
  • Southern Copper said its $1.8 billion Tia Maria project in Peru is 23% complete and on track to begin production by 2027.

Analyst Recommendations:

  • Edwards Lifesciences Corporation: Wolfe Research upgrades to peerperform from underperform. Jefferies upgrades to buy from hold and raises the target price from USD 80 to USD 98.
  • Everest Group, Ltd.: Wolfe Research upgrades to peerperform from underperform.
  • Qorvo, Inc.: Morgan Stanley downgrades to market weight from overweight and raises the target price from USD 94 to USD 110.
  • Skyworks Solutions, Inc.: Piper Sandler & Co upgrades to overweight from neutral and raises the target price from USD 70 to USD 140. 
  • Ati Inc.: TD Cowen maintains its buy recommendation and raises the target price from USD 95 to USD 120.
  • Bloom Energy Corporation: BTIG maintains its buy recommendation and raises the target price from USD 80 to USD 145.
  • Carpenter Technology Corporation: JP Morgan maintains its overweight recommendation and raises the target price from USD 305 to USD 388.
  • Commvault Systems, Inc.: RBC Capital maintains its sector perform recommendation and reduces the target price from USD 217 to USD 167.
  • Corning Incorporated: Barclays maintains its equalweight recommendation and raises the target price from USD 65 to USD 83.
  • Iqvia Holdings Inc.: JP Morgan maintains its overweight recommendation and raises the target price from USD 177 to USD 255.
  • Lyft, Inc.: Roth Capital Partners maintains its buy recommendation and raises the target price from USD 19 to USD 25.
  • Seagate Technology Holdings Plc: Baird maintains its outperform recommendation and raises the target price from USD 188 to USD 270.
  • Sofi Technologies, Inc.: Citi maintains its buy recommendation and raises the target price from USD 28 to USD 37.
  • Tenet Healthcare Corporation: Cantor Fitzgerald maintains its overweight recommendation and raises the target price from USD 190 to USD 245.
  • Tesla, Inc.: President Capital Management Corp maintains its buy recommendation and raises the target price from USD 373 to USD 529.
  • Unitedhealth Group Inc.: Nephron Research LLC maintains its buy recommendation and raises the target price from USD 293 to USD 438.
  • Universal Health Services, Inc.: Nephron Research LLC maintains its hold recommendation and raises the target price from USD 189 to USD 238.
  • Wayfair Inc.: BMO Capital Markets maintains its market perform recommendation and raises the target price from USD 68 to USD 110.