October 29th Market Overview

Happy Wednesday

The Fed cut rates but the market didn't like what came after. Powell said a December cut is "far from" guaranteed and stocks reversed from fresh highs. I think the market got too far ahead of itself pricing in near certainty.

Big tech reports tonight with Microsoft, Alphabet, and Meta. Tomorrow's the meeting with Xi.

P.S. Announcing NEW tool I built tomorrow for premium members, sorry I need one more day!

Today's Big Picture

Powell Throws Doubt on December Rate Cut 
The Fed cut rates to 3.75%-4% as expected. Powell then said a December cut is "not a foregone conclusion, far from it." Markets had priced in 90% odds of another cut and reversed when he pushed back. The two-way dissents show a divided committee.

Nvidia Crosses $5 Trillion 
$NVDA became the first company to hit $5 trillion. CEO Jensen Huang disclosed $500 billion in confirmed orders for Blackwell and Rubin chips through 2026. The AI infrastructure build-out is real and accelerating.

China Sends Signal Before Xi Meeting 
China bought 180,000 tons of U.S. soybeans, its first major order in months, one day before Trump and Xi meet in South Korea. The timing is deliberate.

Market Overview

Index Performance

Stock Spotlight

Caterpillar $CAT ( ▼ 0.4% ) 
had its best day since October 2008 after earnings crushed estimates. Revenue hit $17.64 billion versus $16.77 billion expected. Industrial and construction demand is stronger than the market thought.

Fiserv $FI ( ▼ 7.66% ) 
dropped hard after missing earnings and cutting guidance. Earned $2.04 per share on $4.92 billion revenue versus expectations of $2.64 and $5.35 billion. BTIG called it "shockingly bad."

Nvidia $NVDA ( ▼ 2.0% ) 
and Uber $UBER are partnering on autonomous vehicles. Uber will deploy Nvidia chips in self-driving cars starting 2027, targeting 100,000 vehicles. This opens a new revenue stream for Nvidia beyond data centers.

Big Name Updates

Microsoft $MSFT ( ▼ 2.92% ) 
now owns 27% of OpenAI, valued at $135 billion. OpenAI committed to buy $250 billion in Azure services. This locks in massive cloud revenue and keeps OpenAI's AI models running exclusively on Microsoft infrastructure.

Amazon $AMZN ( ▼ 3.23% ) 
is investing $5 billion more in South Korea data centers through 2031. Combined with June's $4 billion commitment, that's $9 billion total. AWS is racing to build AI computing capacity in Asia.

Tesla $TSLA ( ▼ 4.64% ) 
got a price target hike to $471 from $341 at Bank of America. The math: Robotaxi represents 45% of Tesla's value, core cars just 12%. That's a big bet on unproven self-driving business.

Lockheed Martin $LMT ( ▲ 0.91% ) 
is bringing Google's $GOOGL AI into classified defense systems. The models will run on secure networks for weapons R&D and military logistics.

Other Notable Company News

Eli Lilly $LLY ( ▲ 3.81% ) 
is building an AI supercomputer with Nvidia $NVDA to speed up drug discovery. Another AI compute deal for Nvidia.

Joby Aviation $JOBY ( ▼ 2.82% ) 
will use Nvidia chips in its flying air taxis. Nvidia is everywhere in autonomous vehicles now.

CVS Health $CVS ( ▼ 4.85% ) beat revenue expectations at $102.87 billion but posted a $3.99 billion loss. Top line growth masking operational problems.

UnitedHealth $UNH ( ▼ 2.96% ) 
downgraded to hold at Deutsche Bank. Recovery story already priced in with limited upside from here.

Sector Watch

Bond Market

Treasury yields jumped after Powell's comments. The 10-year broke back above 4% while the 2-year rose to 3.58% from 3.49%. The 2-year moved more because it tracks near-term Fed policy. The Fed also announced it will stop reducing Treasury holdings on December 1, ending quantitative tightening.

Policy Watch

The Fed

Powell's press conference drove the market reversal. The committee was split with dissents on both sides. Governor Stephen Miran wanted a half-point cut while Kansas City Fed President Jeffrey Schmid voted to hold steady. That's rare.

Powell compared setting policy during the government shutdown to "driving in the fog." Translation: Without labor market data, the Fed will move slower.

Government Shutdown

Senate Majority Leader Thune said shutdown talks are progressing. The data blackout continues. No jobs report, no CPI until the government reopens.

Fiscal & Trade

• Trump finalized a trade deal with South Korea, cutting auto tariffs to 15%

• Trump will discuss Nvidia's $NVDA Blackwell chip access with Xi tomorrow

• China meeting EU officials Friday on rare earth metals supply

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What To Watch

Trump-Xi Meeting Tomorrow 
This is what matters most this week. Markets want progress on trade and Nvidia's access to China. The soybean purchase yesterday shows China wants a deal.

Big Tech Earnings Tonight
Alphabet $GOOGL, Meta $META, and Microsoft $MSFT report after the close. Apple $AAPL and Amazon $AMZN report Thursday. AI spending plans will move the market. With Mag 7 driving most gains this year, any miss will hurt.

December Fed Decision 
Powell pushed back on a December cut six weeks early. Traders now see 65% odds down from 90%. If the shutdown ends and labor data weakens, those odds go back up.

Thanks for reading 🙂

- John