The S&P 500 (Index: SPX) set a new record high of 6,890.89 on Tuesday, 28 October 2025 following a new trade truce between the U.S. and China over the weekend and big deals and earnings among AI companies on Tuesday. Unfortunately, that new record high came the day before the Fed cut U.S. interest rates and Federal Reserve Chair Jerome Powell said some things that upset investor expectations. The index went into retreat, ending the week at 6,840.20, up just 0.7% from the previous week's close.

After the Fed reduced the Federal Funds Rate by a quarter percent to a target range of 3.75-4.00%, the CME Group's FedWatch Tool projects one more quarter point cut to this base interest rate in 2025. That rate cut is still expected on 10 December (2025-Q4), even though Fed Chair Jerome Powell tried to cast doubt on whether the Fed will follow through with another interest rate reduction before the end of the year. The FedWatch tool captured that change in expectation by lowering the probability of a December rate cut from more than 90% to 63%.

In 2026, the FedWatch tool anticipates better than 50% probabilities for quarter point rate cuts on 29 April (2026-Q2) and 16 September (2026-Q3), though the potential timing of these rate cuts has become very fluid in response to Fed Chair Powell's comments.

The net effect of Powell's statements has been to keep investors focused on the current quarter of 2025-Q4 in setting current day stock prices. The latest update of the alternative futures chart shows the S&P 500's trajectory pacing the projection associated with investors focusing their forward-looking attention on 2025-Q4.

That's not much different than the projection for 2026-Q3, but the context provided by the market-moving headlines that communicate the now open question of whether the Fed will act to cut rates again in December 2025 sets the expectations associated with 2025-Q4 as predominant.

Monday, 27 October 2025

• Signs and portents for the U.S. economy:
• Bessent says US, China reach framework deal on rare earths, Trump's tariff threat -NBC interview
• China will delay rare-earths rules, buy US soybeans, Bessent says
• Trump inks deals on trade, minerals with Southeast Asian partners
• Thailand, US reach framework agreement on trade
• US, Vietnam agree to boost trade, tariffs on some Vietnamese goods may be removed
• Oil settles lower as OPEC plans to increase oil output
• Chicago Fed puts October unemployment rate at 4.35%, little changed from last official report
• Exclusive: Amazon targets as many as 30,000 corporate job cuts, sources say
• Fed minions, Bank of Canada minions expected to cut rates soon:
• Fed poised to cut rates this week, with more easing likely on tap
• Countdown to Fed cut: Bond investors scale back on longer-dated Treasuries
• Bank of Canada poised to cut rates to 2.25% amid economic slowdown
• BOJ minions get more data supporting plan to hike Japan's interest rates, JapanGov minion claims not coordinating with US on BOJ policies:
• Japan's leading indicator of service inflation perks up in September
• Japan, US did not directly discuss BOJ policy, finmin Katayama says
• ECB minions get mixed Eurozone economic data:
• Euro zone firms optimistic but profits are falling, ECB surveys show
• Wall Street rises to all-time high as tech stocks rally ahead of key earnings
• Wall St scales fresh highs on tech earnings, US-China trade optimism

Tuesday, 28 October 2025

• Signs and portents for the U.S. economy:
• US single-family home prices increase in August, FHFA says
• US companies step up job cuts amid uncertain economy
• Oil falls 2% as investors weigh Russia sanctions, OPEC+ output plans
• Fed minions expect to get new boss in 2026:
• Trump slams Fed chair, eyes replacement in a few months
• Bigger trouble developing in Eurozone:
• European companies cut jobs in response to slowing economy
• Wall Street ended higher as the S&P 500 tagged 6,900
• Wall Street indexes post record closing highs as Nvidia jumps, megacap earnings ahead
• Nvidia's stock market value nears record $5 trillion
• Nvidia's $1 billion stake sends Nokia to decade high on AI hopes
• Nvidia will build AI supercomputers for US Energy Department, announces total bookings of $500 billion
• Stellantis ties up with Nvidia, Uber to advance robotaxi development
• Lilly partners with Nvidia on AI supercomputer to speed up drug development
• Apple hits $4 trillion market value as new iPhone models revitalize sales
• Microsoft shares once again surpass $4 trillion valuation, joining Nvidia
• OpenAI may move forward with new business structure, partnership with Microsoft, regulators say

Wednesday, 29 October 2025

• Signs and portents for the U.S. economy:
• Oil settles higher on large drop in US stockpiles, trade optimism
• Trump announces trade breakthrough with South Korea on Asia trip
• Key US mortgage rate drops to 13-month low, industry group says
• US pending home sales come in flat in September even as mortgage rates ease
• Fed minions cut rates and end quantitative tightening as expected, but claim expected December 2025 rate cut may not happen:
• Federal Reserve cuts by another 25 basis points, moves to end QT
• Fed to end balance sheet reduction on December 1
• VIEW Fed delivers expected rate cut; Powell says December rate cut not assured
• Trump again targets Fed's Powell on interest rate cuts
• Fed's Standing Repo Facility hits record high as policy meeting outcome looms
• Bigger U.S. trade deal developing in China:
• Looming Trump-Xi meeting revives hope of US-China trade truce
• Exclusive: China buys US soybean cargoes ahead of Trump-Xi meet, sources say
• Trump says he may speak to China's Xi about Nvidia's 'super-duper' Blackwell chip
• Better economic growth developing in Japan:
• Japan says economy recovering led by capex in October
• ECB minions want a piece of the action with digital currencies:
• ECB must have active role in payments' evolution to protect public trust in money
• Wall Street ended mixed after Powell says Dec cut 'far from' a foregone conclusion
• Yields soar as traders dump bonds after Fed's Powell throws Dec rate cut in flux
• S&P 500 down slightly as Powell says December rate cut not a foregone conclusion
• Nvidia storms past $5 trillion valuation as AI boom powers meteoric rise

Thursday, 30 October 2025

• Signs and portents for the U.S. economy:
• Trump shaves China tariffs in deal with Xi on fentanyl, rare earths
• US gets rare earth reprieve from China, but not rollback
• China vows to boost US farm trade but leaves details unclear
• Trump says US to cut fentanyl tariff to 10% after talks with China's Xi
• Oil falls as investors assess US-China trade truce
• US pending home sales flat in September; job market worries likely dissuading buyers
• Fed minions focus investors on their December rate hike meeting:
• Fed adds wrinkle for markets with December cut now in doubt
• Bigger trouble, stimulus developing in China:
• China factory activity stumbles as export orders dry up
• BOJ minions hold Japan's interest rates steady, signal central bank will likely hike them soon despite inflation they promoted:
• Bank of Japan keeps rates steady
• BOJ Governor Ueda's comments at news conference
• BOJ chief signals chance of rate hike soon, says wage momentum key
• Core consumer prices in Japan's capital accelerate, keep BOJ under pressure
• ECB minions do nothing, start thinking about what, if anything, they'll do next:
• ECB keeps rates unchanged as economy holds up for now
• Lagarde's statement after ECB policy meeting
• ECB policymakers prepare for December showdown on inflation, rates
• Wall Street ended lower after disappointing big tech earnings
• Wall Street indexes fall as Meta, Microsoft drag, along with Fed rate concerns

Friday, 31 October 2025

• Signs and portents for the U.S. economy:
• Oil ends slightly up, trade choppy on report, denial of US attack plan on Venezuela
• Ample supply, subdued demand to curb oil prices despite geopolitical risks
• OPEC+ likely to agree small oil output increase for December, sources say
• Obamacare premiums double, adding post Halloween fright for US health insurance shoppers
• AI could rase U.S. labor productivity 15%, meaningful boost to GDP starting 27’ – GS’ Briggs
• Fed minions split on need for rate cut in December, see lots of banks needing fast cash to avoid liquidity problems:
• Fed's Waller calls for December rate cut, as hawks press for policy pause
• Fed's Logan says this week's rate cut was not needed, opposes one in December
• Banks tap Fed Standing Repo Facility in record numbers amid month-end pressures
• Bigger trouble, stimulus developing in China:
• China needs 4.17% annual GDP growth to meet 2035 goal, publication shows
• BOJ minions claim they really want to raise interest rates later:
• BOJ locks in near-term rate hike, yen may sway timing
• ECB minions see little Eurozone inflation, claim they'll do almost anything at next interest rate setting meeting:
• Euro zone inflation eases a touch in October but core steady
• ECB should keep "full optionality" at upcoming meetings: Villeroy
• Wall Street finished higher after a back-and-forth session while Amazon rallied
• Wall Street gains on Amazon boost but rate caution tempers enthusiasm

Despite many economic data reports remaining on hold because of the Senate Democrats' ongoing refusal to fund government operations, the Atlanta Fed's GDPNow tool's projection of real GDP growth in the U.S. during the recently ended 2025-Q3 ticked up to +3.9% because of positive existing home sales data, which comes from private sector sources. The BEA's first official estimate of GDP for 2025-Q3 however remains on hold.

Image credit: Microsoft Copilot Designer. Prompt: "An editorial cartoon of a Wall Street bull and bear who are getting tired of Federal Reserve officials playing a game of keep away with them for interest rate cuts".