Stocks Pressured as Fed Chair Powell Downplays Further Rate Cuts

Group 1: Mortgage Applications - US MBA mortgage applications increased by +7.1% for the week ending October 24, with the purchase mortgage sub-index rising by +4.5% and the refinancing sub-index up by +9.3% [1] Group 2: Semiconductor Stocks - Semiconductor stocks showed strength, particularly Nvidia, which rose by more than +2% following President Trump's openness to providing China access to Nvidia's Blackwell AI processor as part of a trade deal [2] - Other chipmakers such as Broadcom, Lam Research, and Applied Materials also saw gains of more than +3% [16] Group 3: Stock Market Performance - US stock indexes initially rallied, with the S&P 500, Dow Jones Industrial Average, and Nasdaq 100 reaching new all-time highs, supported by easing global trade tensions and potential tariff reductions on Chinese goods [3][4] - The S&P 500 Index closed unchanged, while the Dow Jones Industrial Average fell by -0.16%, and the Nasdaq 100 rose by +0.41% [5] Group 4: Federal Reserve Actions - The FOMC cut the federal funds target range by -25 basis points to 3.75%-4.00% and announced the end of quantitative tightening effective December 1 [5] - Fed Chair Powell indicated that further interest rate cuts are not guaranteed, with markets pricing in a 67% chance of another -25 basis point cut at the next FOMC meeting [6] Group 5: Trade Relations - A tentative trade agreement between the US and China was reached, which is expected to be officially announced at the upcoming summit between Presidents Trump and Xi [7] - The agreement includes China agreeing not to restrict the export of rare earth metals for at least one year and committing to purchase a substantial amount of US soybeans [7] Group 6: Earnings Reports - A significant number of S&P 500 companies are reporting earnings, with 84% of those reported so far beating forecasts, indicating a strong Q3 performance [8] - Notable companies reporting include Alphabet, Meta, Microsoft, Apple, and Amazon, with Q3 profits expected to rise by +7.2% year-over-year, the smallest increase in two years [8] Group 7: Company-Specific Performance - Teradyne's Q3 net revenue of $769.2 million exceeded expectations, leading to a +20% increase in its stock price [17] - Seagate Technology reported Q1 adjusted EPS of $2.61, above consensus, resulting in a +19% stock price increase [18] - Centene's unexpected Q3 adjusted EPS profit led to a +12% increase in its stock price, while Caterpillar's strong Q3 results also boosted its stock by +11% [19]