The S&P 500 Index ($SPX) (SPY) rose +0.28% on Wednesday, the Dow Jones Industrial Average ($DOWI) (DIA) rose +0.19%, and the Nasdaq 100 Index ($IUXX) (QQQ) rose +0.55%. December E-mini S&P futures (ESZ26) rose +0.27%, and December E-mini Nasdaq futures (NQZ26) rose +0.38%.
US stocks on Wednesday closed mildly higher after the FOMC results had a slightly dovish tint, with the 2-year T-note yield ending the day down -4 bp. Stocks also received a boost from chip stocks after the world’s second-biggest memory chipmaker SK Hynix reported favorable quarterly results. Stocks were undercut by a +1.5 bp rise in the 10-year T-note yield and a +2.9% rally in WTI oil prices.
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After Wednesday’s close, Alphabet (GOOGL) fell more than -7% after reporting disappointing revenue. By contrast, Microsoft (MSFT) rose more than +3% in after-market trading after its cloud results beat estimates. Oracle (ORCL) rallied more than +11% in after-market trading after projecting a return to positive cash flow.
The FOMC on Wednesday left its federal funds rate target unchanged at 3.75-4.00% by a vote of 10-2, with two FOMC members (Cook and Hammack) dissenting and favoring a rate hike.
The market greeted the FOMC results as a bit dovish. Fed Chair Warsh reiterated the FOMC’s intent to bring inflation back to target, saying the FOMC has “made clear our readiness to act as circumstances require, and we have shown our willingness to act.”
However, some market participants apparently anticipate a more hands-off approach by the FOMC starting in 2027 as the Fed stretches out its rate-setting schedule. Fed Chair Warsh announced Wednesday that one of the FOMC’s eight 2027 meetings will be non-voting and focus on broad policy strategy, meaning 2027 will have only seven voting meetings versus eight in 2026. In 2028, two meetings will be non-voting broad-strategy meetings, reducing rate-setting meetings to six.
The FOMC results could also be seen as a bit dovish because Warsh said financial conditions have tightened, with borrowing becoming more difficult, suggesting the Fed may face less pressure to raise interest rates.
Still, markets are pricing in an 85% chance of a rate cut at the FOMC’s next meeting on December 8-9, little changed from before the FOMC results.
Dec WTI crude oil prices closed up +2.88% on Wednesday after the Wall Street Journal reported late Tuesday that the US has told several Persian Gulf countries to be prepared for a short, intense military campaign against Iran. WSJ said President Trump hasn’t yet decided to proceed with the attack but is leaning toward an attack after next Tuesday’s mid-term elections.
Axios reported Wednesday that a US military operation is expected to include a week of massive strikes on Iranian leadership, energy, nuclear, and infrastructure targets, according to US and Israeli officials, if negotiations do not bear fruit. Axios reported that Qatar is leading behind-the-scenes mediation efforts, supported by Pakistan, Saudi Arabia, Egypt, and Türkiye.
The Sep US trade deficit of -$134.9 billion was wider than market expectations of -$130.2 billion. Sep exports rose +2.4% m/m, weaker than expectations of +2.6%. Sep imports rose +2.6% m/m, stronger than market expectations of +1.3%.
Stocks are supported by the prospect of solid quarterly earnings. According to data compiled by Bloomberg Intelligence, Q3 S&P 500 earnings are expected to climb by +26% from a year earlier, up from a July estimate of 22%. As of Tuesday, 175 of the S&P 500 companies have reported results, with 82% beating estimates.
Overseas stock markets closed mixed on Wednesday. The Euro Stoxx 50 closed up +0.05%. China’s Shanghai Composite closed up +0.91%. Japan's Nikkei-225 Stock Average closed up +1.08%.
Interest Rates
December 10-year T-notes (ZNZ6) fell -2 ticks. The 10-year T-note yield rose +1.5 bp to 5.011%. The dovish tint to the FOMC results pushed short yields lower, but longer-term yields were steady to slightly higher. The 2-year T-note yield fell -4.4 bp to 4.693%. The longer end of the yield curve still seems to have questions about the Fed’s inflation-fighting resolve. The T-note market saw some supply overhang as the Treasury will sell $44 billion of 7-year T-notes on Thursday.
European government bond yields were mixed on Wednesday. The 10-year German bund yield rose +1.1 bp to 3.371%. The 10-year UK gilt yield fell -2.5 bp to 5.321%.
Markets are pricing in only a 2% chance of a +25 bp ECB rate hike at Thursday’s ECB meeting, but an 85% chance of a rate hike at the following meeting on December 17.
US Stock Movers
The Magnificent Seven closed mostly lower, led by declines of more than -1% in Nvidia (NVDA) and Meta (META). However, Alphabet (GOOGL) closed up +1.3% after Bloomberg reported that OpenAI intends to buy AI computing chips from Google.
The world’s second-biggest memory chipmaker, SK Hynix, reported favorable quarterly results, and its South Korean stock (000660) rallied +9.5%, adding to Tuesday’s +5.3% gain. The SK Hynix US-listed ADR (SKHY) rallied +13% in Wednesday’s US trading. SK Hynix said its memory chips are sold out through 2029 under long-term supply contracts, improving the company’s earnings visibility. The company’s quarterly earnings beat market expectations, and it announced a $45 billion shareholder payout plan. The company also announced plans to expand production capacity.
The iShares Semiconductor ETF (SOXX) rose +2% on support from the SK Hynix results. Micron Technology (MU), Lam Research (LRCX), and Applied Materials (AMAT) all rallied by more than +5%.
Bitcoin (^BTCUSD) rose +0.4%, supporting crypto stocks. Galaxy Digital (GLXY) rose more than +11%, and Riot Platforms (RIOT) rose more than +6%.
Wendy’s (WEN) rallied +15% after a hedge fund group led by Trian Fund Management submitted a non-binding buyout offer at $7.35 per share, which is about a 20% premium to Tuesday’s close. Trian already owns about 16% of Wendy’s shares.
GE Healthcare (GEHC) rallied more than +6% after a quarterly earnings beat and higher full-year adjusted earnings guidance.
Etsy (ETSY) rallied more than +5% after positive Q3 results.
GE Vernova (GEV) fell -1.9% despite providing positive full-year revenue guidance. GE Vernova will buy German-based Trench Group for $9 billion in order to boost its capacity to sell high-voltage grid equipment to meet rising electricity demand.
Boston Scientific (BSX) fell more than -5% after its full-year adjusted earnings guidance was below market expectations.
Robinhood Markets (HOOD) fell more than -3% after an earnings miss.
Earnings Reports (10/29/2026)
Eli Lilly & Co (LLY), DR Horton Inc (DHI), Merck & Co Inc (MRK), Altria Group Inc (MO), LKQ Corp (LKQ), XPO Inc (XPO), Restaurant Brands Internationa (QSR), Silgan Holdings Inc (SLGN), Hyatt Hotels Corp (H), Intercontinental Exchange Inc (ICE), Leonardo DRS Inc (DRS), TPG Inc (TPG), Textron Inc (TXT), Saia Inc (SAIA), Ares Management Corp (ARES), Bunge Global SA (BG), Builders FirstSource Inc (BLDR), Blue Owl Capital Inc (OWL), Cheniere Energy Inc (LNG), Entegris Inc (ENTG), API Group Corp (APG), DT Midstream Inc (DTM), Medical Properties Trust Inc (MPT), Kimco Realty Corp (KIM), BorgWarner Inc (BWA), Hershey Co/The (HSY), AGCO Corp (AGCO), Xcel Energy Inc (XEL), FTI Consulting Inc (FCN), Allegro MicroSystems Inc (ALGM), Huntington Ingalls Industries (HII), Willis Towers Watson PLC (WTW), Carrier Global Corp (CARR), Mastercard Inc (MA), Baxter International Inc (BAX), Trane Technologies PLC (TT), WESCO International Inc (WCC), Brunswick Corp/DE (BC), West Pharmaceutical Services (WST), Sirius XM Holdings Inc (SIRI), KBR Inc (KBR), Insmed Inc (INSM), Axalta Coating Systems Ltd (AXTA), L3Harris Technologies Inc (LHX), Tenet Healthcare Corp (THC), A O Smith Corp (AOS), Cognizant Technology Solutions (CTSH), Linde PLC (LIN), CRH PLC (CRH), Oshkosh Corp (OSK), Alnylam Pharmaceuticals Inc (ALNY), EMCOR Group Inc (EME), IDACORP Inc (IDA), WEC Energy Group Inc (WEC), FTAI Aviation Ltd (FTAI), Quanta Services Inc (PWR), Vulcan Materials Co (VMC), Caterpillar Inc (CAT), Norwegian Cruise Line Holdings (NCLH), Avery Dennison Corp (AVY), TechnipFMC PLC (FTI), Ionis Pharmaceuticals Inc (IONS), American Electric Power Co Inc (AEP), Seaboard Corp (SEB), Tradeweb Markets Inc (TW), Howmet Aerospace Inc (HWM), Ameriprise Financial Inc (AMP), Crocs Inc (CROX), T Rowe Price Group Inc (TROW), Incyte Corp (INCY), Bristol-Myers Squibb Co (BMY), ATI Inc (ATI), Cullen/Frost Bankers Inc (CFR), Columbia Sportswear Co (COLM), Stryker Corp (SYK), Eastman Chemical Co (EMN), AptarGroup Inc (ATR), Gaming and Leisure Properties (GLPI), Republic Services Inc (RSG), Schneider National Inc (SNDR), ResMed Inc (RMD), Ryan Specialty Holdings Inc (RYAN), Digital Realty Trust Inc (DLR), Fedex Freight Holding Co Inc (FDXF), Cousins Properties Inc (CUZ), Edison International (EIX), Weyerhaeuser Co (WY), MasTec Inc (MTZ), Bridgebio Pharma Inc (BBIO), Sandisk Corp (SNDK), Dexcom Inc (DXCM), SPX Technologies Inc (SPXC), Ingersoll Rand Inc (IR), Strategy Inc (MSTR), ROBLOX Corp (RBLX), Floor & Decor Holdings Inc (FND), Illumina Inc (ILMN), GoDaddy Inc (GDDY), Twilio Inc (TWLO), Starbucks Corp (SBUX), Monolithic Power Systems Inc (MPWR), Arthur J Gallagher & Co (AJG), Rivian Automotive Inc (RIVN), Intel Corp (INTC), Coinbase Global Inc (COIN), DaVita Inc (DVA), Pinterest Inc (PINS), Mondelez International Inc (MDLZ), First Solar Inc (FSLR), Gilead Sciences Inc (GILD), Amazon.com Inc (AMZN), Exelixis Inc (EXEL), Reddit Inc (RDDT), Bright Horizons Family Solutio (BFAM), Ingram Micro Holding Corp (INGM), Rocket Cos Inc (RKT), Credit Acceptance Corp (CACC), Mohawk Industries Inc (MHK), Alliant Energy Corp (LNT), Veralto Corp (VLTO), Erie Indemnity Co (ERIE), CubeSmart (CUBE), Olin Corp (OLN), Healthcare Realty Trust Inc (HR).
On the date of publication, Rich Asplund did not directly have a position in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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