According to Zhitong Finance APP, on Wednesday, all three major indexes closed higher as the Federal Reserve kept interest rates unchanged. Governor Cook and Cleveland Federal Reserve Bank President Hammack voted against the decision, advocating for a 25 basis point rate hike. Fed Chairman Warsh stated that the central bank will reduce the number of meetings at which members vote on interest rates.
US Stocks
At the close, the Dow Jones Industrial Average rose 97.53 points, or 0.19%, to 52,475.10; the S&P 500 Index gained 21.38 points, or 0.28%, to 7,743.98; and the Nasdaq Composite Index added 72.04 points, or 0.27%, to 26,549.85. SK hynix (SKHY.US) surged over 13%, Micron Technology (MU.US) rose nearly 6%, and Oracle (ORCL.US) climbed 10.5%.
European Stocks
Major European stock indexes closed collectively higher, with the UK's FTSE 100 up 0.07%, France's CAC 40 up 0.04%, Germany's DAX 30 up 0.42%, and Italy's FTSE MIB up 0.40%.
Forex
The US Dollar Index, which measures the greenback against six major currencies, fell 0.11% on the day, closing at 102.211 at the end of the foreign exchange session. At the close of the New York foreign exchange market, 1 euro exchanged for 1.1150 US dollars, up from 1.1135 the previous trading day; 1 British pound exchanged for 1.3316 US dollars, up from 1.3313 the previous trading day. 1 US dollar exchanged for 158.05 Japanese yen, up from 157.95 the previous trading day; 1 US dollar exchanged for 0.8290 Swiss francs, up from 0.8287 the previous trading day; 1 US dollar exchanged for 1.4021 Canadian dollars, down from 1.4052 the previous trading day; 1 US dollar exchanged for 9.9139 Swedish kronor, down from 9.9489 the previous trading day.
Cryptocurrencies
Bitcoin rose over 1%, trading at $80,806 at the time of publication; Ethereum rose over 1.6%, trading at $2,347.
Precious Metals
Spot gold stood at the $4,068.67 level; spot silver was at $53.995 per ounce.
Crude Oil
December-delivery WTI crude oil futures rose 2.9%, settling at $102.78 per barrel; December-delivery Brent crude oil futures rose 1.3%, settling at $115.32 per barrel.
Macro News
Fed Holds Rates Steady, but Two Officials Push for Another Hike. The Federal Reserve decided at this meeting to keep interest rates unchanged, following the central bank's rate hike just last month. The move buys the Fed more time to determine whether further rate increases are necessary to prevent rising energy costs and the artificial intelligence construction boom from spilling over into broader inflation. The decision keeps the Fed's benchmark rate in the 3.75% to 4% range and was approved by a 10-2 vote. Fed Governor Cook and Cleveland Fed President Hammack voted against the decision, advocating for a 25 basis point rate hike. In the policy statement, the rate-setting committee did not significantly alter Wall Street's expectations that the Fed may raise rates again at its next meeting in December. The statement said: "As more information accumulates, the Committee will be able to assess the appropriate policy stance to ensure that inflation returns promptly to the Committee's 2% target."
Media: Vance Sends Letter to Iranian Official Rezaei in Attempt to Restart Peace Talks. According to media reports, US officials and people familiar with the matter said that US Vice President Vance is in contact with Rezaei, Secretary of Iran's Supreme National Security Council, in an attempt to restart peace negotiations. Vance has sent a letter to Rezaei under Trump's direction, testing whether the two sides can find enough common ground to persuade Trump not to order a short, sharp strike on Iran in the coming weeks. Some US officials believe that engaging with Iranian hardliners may yield better diplomatic results. Vance's letter and subsequent discussions between US and Iranian officials did not address the specifics of a peace plan but focused on a possible negotiating framework. Rezaei said last week that Iran would not negotiate with Washington until its core demands are concretely met. A spokesperson for Vance declined to comment on the negotiations. A spokesperson for Iran's Foreign Ministry said they were unaware of Vance's outreach.
"New Bond King" Gundlach Calls Out the Fed: What Are You Waiting For? Time to Hike. "New Bond King" Gundlach said it is unclear why the Fed is delaying further rate hikes. "What are you waiting for? You just upgraded your economic assessment," he said. He was referring to Fed Chairman Warsh's comments at the post-decision press conference about the macroeconomic environment being strong. Gundlach said, "We are heading toward headline CPI reaching 4%. The commodity index is rising in a bull market, and I don't understand why the Fed is so reluctant to act." "I think the Fed's current policy pace is somewhat behind the curve," Gundlach said. He pointed out that the Fed's current policy rate of 3.75% to 4% is clearly below the current two-year US Treasury yield of about 4.7%. He believes this indicates the Fed needs to raise rates further from current levels. "If oil prices don't fall significantly, I think the Fed will have to hike in December," Gundlach said.
Individual Stock News
Marvell Technology Reportedly in Advanced Talks to Acquire Lumentum. According to reports, people familiar with the matter said that Marvell Technology Group (MRVL.US) is in advanced negotiations to acquire data center optical communications equipment maker Lumentum (LITE.US). As the AI industry races to scale up, this potential blockbuster deal could become another major M&A transaction in the sector. The people said the deal could be announced as early as next week. Marvell Technology Group fell more than 10% in after-hours trading at one point, while Lumentum surged 15% at one point. Lumentum produces lasers and other optical technology equipment used to transmit massive amounts of data at high speeds. This hardware is a critical foundation of the AI boom, helping data centers and telecom companies transmit information between servers, different facilities, and other destinations. Marvell currently purchases lasers from Lumentum, so if the deal is reached, it would help streamline its supply chain.
Microsoft Azure Revenue Grows 48%, Beating Expectations; Free Cash Flow Remains Stable. Microsoft (MSFT.US) on Wednesday reported quarterly cloud revenue that exceeded expectations, indicating that the company's massive AI investments are beginning to pay off as Wall Street grows increasingly cautious about big tech companies relying on debt financing to sustain rising spending. In the first fiscal quarter ended September, Microsoft's Azure cloud computing business revenue grew 48% to $33.17 billion, above the market expectation of $32.84 billion. Capital expenditures for the quarter were $45.2 billion, up from $34.9 billion a year earlier. Microsoft had previously forecast first-quarter capital expenditures of $50 billion. The company reported free cash flow of $18.6 billion, compared with market expectations of $8.54 billion. Among hyperscale cloud providers, Microsoft is also the only one expected to remain cash flow positive next year.
AI Investment Returns Under Pressure: Google's Quarterly Revenue and Profit Both Miss Expectations. Google parent Alphabet (GOOG.US) reported quarterly revenue and profit both below market expectations, indicating the company has yet to generate sufficient returns from its AI business to justify its massive investments. Alphabet said that in the three months ended September 30, revenue excluding payments to partners was $111.2 billion, with earnings per share of $2.12, both below Wall Street expectations. Google is racing to build AI infrastructure for itself and its customers, driving capital expenditures to record levels. These investments have helped Google rank among the top suppliers providing computing power to AI companies such as Anthropic and Meta. Google is also developing its own AI models and integrating them into consumer-facing products such as its search engine, YouTube, and Gmail. However, relative to the scale of spending, these efforts have so far not yielded commensurate returns.
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