October 28th Market Overview

Happy Wednesday

The Fed hit pause today. For once, stocks didn’t fall on a Fed day (the S&P 500 had dropped on the last six). The bigger moves came from company news, led by Oracle. I think investors want the big AI spenders to say when the spending tops out, and Oracle just did that in plain language.

I don’t know about you, but I’m eating out less than I was a year ago. Where I’ve felt the pinch most is takeout and groceries. Where are you feeling it?

Let's dig in...

Today's Big Picture

1. The Fed Held, but Two Officials Wanted Another Hike 
   Rates stayed put in a 10-2 vote, six weeks after the Fed’s first hike since 2023. Cleveland Fed President Beth Hammack and Fed Governor Lisa Cook both wanted another quarter-point hike. Governors rarely break ranks, and Cook hadn’t once since joining in 2022. Warsh wouldn’t say what comes next, and traders still see better than 4-in-5 odds of a December hike.
   

2. Oracle Told Investors When Its Spending Peaks 
   Oracle sees revenue reaching $225 billion in fiscal 2030, growing more than a third a year. Its data center spending peaks this fiscal year and next, and it expects to stop burning cash by mid-2028. It also capped new fundraising at $20 billion through 2030, which eases worries about its debt. The stock rose about an eighth after losing a third of its value this year.
   

3. Wendy’s Got a Buyout Offer and Chili’s Raised Its Outlook
   Nelson Peltz’s fund Trian offered about $1.4 billion for Wendy’s, per the Wall Street Journal. Wendy’s was worth about $1.2 billion Tuesday, and nearly a third of its tradable shares were sold short. Chili’s owner Brinker raised its full-year forecast, and Wingstop beat on profit despite weaker sales. All three stocks rose by double digits.

Market Overview

Index Performance

Stock Spotlight

Stellantis $STLA ( ▲ 13.16% )  
rose after CEO Antonio Filosa said Jeep “needs to be improved” and laid out the fix. New versions of the Wrangler, Gladiator and Grand Cherokee arrive in 2027.

Boston Scientific $BSX ( ▼ 4.05% )  
fell after cutting its sales outlook and saying the slowdown lasts into 2027. The heart-rhythm devices that powered its growth for years, Watchman and Farapulse, are losing ground to rivals like Medtronic. The stock is down more than half this year.

Robinhood $HOOD ( ▼ 3.42% )  
fell after missing profit estimates, and its quarterly filing flagged a new risk. AI agents on its app could place trades customers never meant to. Courts or regulators might not hold the customer responsible.

Big Name Updates

Nvidia $NVDA ( ▼ 0.91% )  
chips are still in short supply, says BCA Research. Rental prices for its older Blackwell and Hopper models keep rising. BCA’s Peter Berezin does expect an AI spending bust, just “probably not until 2028.”

Visa $V ( ▲ 0.15% )  
raised its quarterly dividend to 78 cents a share after record yearly revenue of $45.9 billion. Cross-border spending grew faster than total payments, a sign people are still traveling.

SpaceX $SPCX ( ▼ 2.05% )  
slid back to $140 as nearly every space stock fell. Buyers have stepped in at that price twice this month.

UBS $UBS ( ▼ 0.53% )  
grew profit before taxes to about $3.6 billion, up more than a quarter from a year ago. CEO Sergio Ermotti hinted the bank could leave Switzerland if lawmakers demand a much bigger safety cushion.

Other Notable Company News

SK Hynix $SKHY ( ▲ 12.74% )  
kept rising after its record quarter, and UBS says shareholder payouts will likely beat expectations.

Whirlpool $WHR ( ▼ 1.24% )  
fell after Stifel cut it to sell with a $20 target, saying it’s losing U.S. market share.

Cheesecake Factory $CAKE ( ▼ 2.91% )  
slipped even after beating estimates, since the stock had already more than doubled this year.

Deutsche Bank $DB ( ▲ 4.27% )  
pulled in a record 47 billion euros of new client money last quarter.

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Sector Watch

Bond Market

The 2-year Treasury yield, the one that tracks the Fed most closely, fell to near 4.70 while Warsh spoke. Higher oil pushed the 10-year the other way, up to about 5.04.

Policy Watch

Fed

Starting next year, the Fed will vote on rates at seven of its eight meetings, then six in 2028. The others will focus on big-picture strategy, with no rate vote and no statement.

• Warsh said higher rates are affecting the AI buildout, with investors getting pickier about what they fund.

• The White House wants a hearing next week in its second attempt to fire Lisa Cook. Warsh said he has no plans to take part.

• Warsh said next Tuesday’s midterms played no role in today’s decision.

Oil and Diesel

U.S. oil is back around $102 a barrel after an attack on a Saudi refinery.

• Diesel averaged $6.35 a gallon today, per AAA. That’s 7 cents higher than when Trump announced a deal for Russian diesel on Oct. 9.

• Analysts doubt Russia can deliver. Even if it does, that’s about 100,000 to 125,000 barrels a day. Russia shipped about 800,000 a day last year

What to Watch

The AI company quietly automating every Walmart distribution center. 
23 billion in orders on the book.

It's just one of seven names in this free MarketBeat report.

SpaceX Earnings Tonight

SpaceX $SPCX reports after the bell, its second earnings report since going public in June. Capital spending hit $18.4 billion last quarter, up from $2.8 billion a year earlier. I want to see how fast the AI data-center business is growing to cover that bill.

Netflix Earnings Tonight

Netflix $NFLX also reports after the close, with Wall Street expecting 82 cents a share on $12.87 billion in revenue. This week it ousted two creative executives and cut 1,000 jobs. Listen for how it plans to get U.S. viewers watching more.

Thanks for reading - you are now the more informed 🙂

- John

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