The Federal Reserve delivered the expected quarter-point cut, but Chair Jerome Powell's remarks had more caveats than comfort. Missing data from the government shutdown, he warned, could make future decisions trickier. That admission nudged traders to scale back bets on another rate cut in December, from 90% odds to roughly 70%.

The message was clear enough: the Fed is easing, but nervously. Policymakers are flying blind through an economic fog, trying to steady markets without knowing whether inflation or jobs are drifting off course. As central bankers go, Mr Powell is measured, but even he cannot disguise the awkward truth that monetary policy has become an act of guesswork wrapped in reassurance.

The markets prefer to hear what they want: that the Fed still has their back. But for an institution so obsessed with data, being forced to rely on instinct feels unnatural.

If the Fed is cautious, Big Tech is anything but. Meta, Microsoft and Alphabet, three of the world's most influential firms, have embarked on a breathtaking spending binge in artificial intelligence. Investors, however, are beginning to wonder whether the costs of building the future might swamp the profits of the present.

Meta's latest results shocked markets with a $16 billion one-off charge that wiped out quarterly profit, coupled with a warning of "notably larger" capital expenditures next year. Microsoft, too, spooked shareholders by admitting its AI outlays are accelerating, reversing earlier pledges of spending restraint. Only Alphabet managed to please investors, reporting better-than-expected results as AI demand bolstered advertising and cloud revenues.

This divergence captures the moment perfectly: Silicon Valley's giants are both the engine and the anxiety of global markets. Their vast valuations rest on the promise that AI will make everything faster, smarter, and cheaper someday. For now, it mostly makes their budgets balloon. Even so, investors remain entranced.

Meanwhile, President Trump and President Xi emerged from a two-hour meeting with handshakes and headlines about a new U.S.–China trade deal. America will ease tariffs, China will buy more soybeans and temporarily suspend rare-earth export controls. The accord, good for one year, sounds generous but reads like a truce of convenience: both sides weary enough to pretend harmony.

Markets cheered. Shares of rare-earth miners jumped, as if diplomatic flair alone could rewrite trade flows. Yet the fine print remains fuzzy, and enforcement depends on goodwill.

Add it all up - the Fed's uncertainty, Big Tech's extravagance, and a trade détente built on sand: it looks rather unstable.

In other news, Donald Trump has called for the US military to resume nuclear testing after Russia unveiled a number of innovations in this area. Investors are also awaiting a series of European GDP figures and a decision from the ECB. Unlike the Fed, the ECB is not expected to change its rates, as they are close to target in an inflationary environment that is less severe than in the United States. Finally, there will be many more symbolic results in the United States today, including those from Apple and Amazon.

Red dominates in Asia this morning, particularly in China and Australia. South Korea and Japan are managing to gain some ground. Early European trading could be mixed across indices, as the results of certain companies could weigh heavily on the balance at the opening.

Today's economic highlights:

On today's agenda: economic confidence in France; the KOF leading indicator in Switzerland; in Germany, unemployment change, GDP SA QoQ, harmonized CPI EU, and CPI; in the eurozone, economic confidence, unemployment rate, ECB deposit facility rate, ECB refinancing rate, and ECB marginal lending facility; in the United States, annualized GDP and new jobless claims. See the full calendar here.

In corporate news:

    • International Paper reported a $1.1 billion quarterly loss due to a $1 billion impairment charge linked to the sale of its cellulose fibers business, missing revenue estimates and dropping 6% premarket.
    • Fox posted higher-than-expected revenue driven by strong ad sales from Tubi and NFL viewership, and announced a $1.5 billion share buyback.
    • Hershey raised its annual forecasts after beating earnings estimates, buoyed by higher-priced chocolates and growing demand for healthy snacks.
    • Kimberly-Clark topped quarterly sales estimates as inflation-strained shoppers stuck with affordable staples, though margins were hurt by tariffs and restructuring costs.
    • Intercontinental Exchange beat profit estimates due to growth in trading volumes and its data and fixed income segments, supported by market volatility and AI-linked trading.
    • Meta Platforms plans to raise at least $25 billion via a bond sale, according to Bloomberg.
    • Eli Lilly hiked its annual profit forecast after strong global demand for weight-loss drugs Zepbound and Mounjaro propelled it past quarterly estimates.
    • Mastercard surpassed profit forecasts as transaction volumes remained strong and its value-added services segment posted 25% revenue growth.
    • Blue Owl Capital posted a rise in profit, driven by strong credit and real asset platform performance and $14 billion in new capital commitments.
    • Cigna exceeded earnings estimates on strong performance from its Evernorth health services segment, and reaffirmed its annual profit outlook.
    • Estee Lauder beat quarterly sales and earnings expectations thanks to fragrance growth and improving demand in China, signaling progress in its turnaround efforts.
    • Altria issued a weaker annual profit forecast as tobacco demand slumped and NJOY vape sales were halted due to legal issues.
    • Chipotle and Starbucks shares fell after both flagged weak consumer demand and rising input costs, prompting Chipotle to slash its sales outlook again.
    • Reliance Jio and Google announced a partnership offering 18 months of free Gemini Pro access to Jio users, ramping up AI adoption in India.
    • Restaurant Brands topped estimates with strong traffic at Burger King and Tim Hortons, helped by value pricing and global diversification.
    • Bristol-Myers Squibb beat revenue expectations on strong Opdivo and Eliquis sales, and raised its full-year revenue guidance.
    • Vulcan Materials beat profit and revenue forecasts as public construction demand lifted aggregates shipments and prices.
    • OpenAI is laying IPO groundwork with a potential $1 trillion valuation by 2026-2027, as it seeks capital for expanding AI infrastructure.
    • Howmet Aerospace raised annual guidance on strong demand for aircraft parts from Airbus and Boeing, and plans to pass tariffs-related costs to customers.
    • HF Sinclair exceeded profit expectations thanks to stronger refining margins and robust performance in its midstream segment.
    • Roblox lifted its annual bookings forecast again after viral games boosted in-game spending and daily active users surpassed 150 million.
    • Comcast beat quarterly estimates on a "Jurassic World" box office hit and strong theme park revenues, despite continued broadband subscriber losses.
    • Microsoft, Alphabet, and Meta signaled higher capital spending for AI infrastructure, but investors favored Alphabet's strong cash flow management.
    • Nvidia CEO met with Samsung and Hyundai in South Korea, deepening AI ties amid U.S.-China chip tensions.
    • State Street exited a major climate group with its U.S. arm, amid pressure from U.S. political scrutiny and legal concerns over ESG coordination.
    • Tesla recalled 6,200 Cybertrucks over a light bar issue and will debut its Cybercab robotaxi in Shanghai at a November expo.
    • Ford recalled 227,000 U.S. vehicles due to windshield and seat frame defects, adding to an earlier recall affecting moonroof wind deflectors.
    • Coles maintained a sales growth lead over Woolworths, though analysts suggest Woolworths may be closing the gap through pricing and promotions.
    • eBay forecast disappointing holiday-quarter profit due to cross-border trade headwinds and the removal of U.S. de minimis tariff exemptions.
    • Merck reported higher revenue on Keytruda growth, though narrowed full-year guidance and falling Gardasil sales in China weighed on shares.
    • U.S. coffee roasters, including Starbucks, are depleting Brazilian coffee stocks amid a 50% tariff imposed by the Trump administration, fueling inflation and supply uncertainty.

    Analyst Recommendations:

    • American Electric Power Company, Inc.: BMO Capital Markets downgrades to market perform from outperform with a target price of USD 126.
    • Avantor, Inc.: JP Morgan downgrades to neutral from overweight and reduces the target price from USD 14 to USD 12.
    • Boeing: Deutsche Bank downgrades to hold from buy and reduces the target price from USD 255 to USD 240.
    • Coinbase Global, Inc.: HC Wainwright & Co upgrades to buy from sell with a price target raised from USD 300 to USD 425.
    • Comerica Incorporated: Evercore ISI upgrades to in-line from underperform with a target price of USD 88.
    • Fiserv, Inc.: Goldman Sachs downgrades to neutral from buy and reduces the target price from USD 149 to USD 79. 
    • Fmc Corporation: Fermium Research LLC downgrades to hold from buy and reduces the target price from USD 45 to USD 28.
    • Verisk Analytics, Inc.: Barclays upgrades to overweight from equalweight and reduces the target price from USD 310 to USD 275.
    • Alphabet Inc.: Canaccord Genuity maintains its buy recommendation and raises the target price from USD 270 to USD 330.
    • Aurora Innovation, Inc.: TD Cowen maintains its hold recommendation and reduces the target price from USD 7.40 to USD 5.50.
    • Bio-Rad Laboratories, Inc.: Wells Fargo maintains its equalweight recommendation and raises the target price from USD 265 to USD 340.
    • Bridgebio Pharma, Inc.: TD Cowen maintains its buy recommendation and raises the target price from USD 60 to USD 95.
    • C.h. Robinson Worldwide, Inc.: Bernstein maintains its market perform recommendation and raises the target price from USD 108 to USD 135.
    • Caterpillar Inc.: Daiwa Securities maintains its neutral recommendation and raises the target price from USD 430 to USD 595.
    • Centene Corporation: Nephron Research LLC maintains its buy recommendation and raises the target price from USD 36 to USD 45.
    • Chipotle Mexican Grill, Inc.: BTIG maintains its buy recommendation and reduces the target price from USD 57 to USD 45.
    • Flex Ltd.: JP Morgan maintains its overweight recommendation and raises the target price from USD 60 to USD 75.
    • Flowserve Corporation: Citi maintains its buy recommendation and raises the target price from USD 68 to USD 82.
    • Ionis Pharmaceuticals, Inc.: Bernstein maintains its market perform recommendation and raises the target price from USD 50 to USD 65.
    • Kla Corporation: BNP Paribas maintains its neutral recommendation and raises the target price from USD 820 to USD 1200.
    • Sprouts Farmers Market, Inc.: BMO Capital Markets maintains its market perform recommendation and reduces the target price from USD 120 to USD 90.
    • Te Connectivity Plc: JP Morgan maintains its neutral recommendation and raises the target price from USD 204 to USD 260.
    • Wayfair Inc.: RBC Capital maintains its sector perform recommendation and raises the target price from USD 51 to USD 86.