Markets Insights

At the start of the week, the major indexes reached record highs: the S&P 500 rose about 1.2% on Monday (Oct 27), the Dow Jones Industrial Average climbed ~0.7%, and the Nasdaq Composite jumped ~1.9%.

A key anchor for the market was softer-than-expected inflation data, which reduced fears of aggressive rate hikes and bolstered expectations that the Fed could begin easing policy.

Tech, especially semiconductor and AI-related stocks, were a strong driver. For example, Broadcom surged nearly 10 % after an AI-processor deal with OpenAI.

The sharp reversal on Friday was triggered by renewed threats of a 100% tariff increase on Chinese goods and export controls from the U.S. side.

Encouraging inflation data (PCE) helped lift sentiment, reinforcing hope for continued interest rate cuts.

The Fed’s meeting on September 16-17 was front and center. Markets largely expected a 25 basis point cut, and commentary/trends pointed toward more cuts later in the year.

Softer inflation signals, less-robust labor reports, and mixed economic data reinforced market expectations that the Fed will cut rates at its next policy meeting.

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