US Stocks closed modestly higher after the Fed held rates at 3.75–4.00% in a 10–2 vote, with two officials dissenting in favor of a hike. The S&P 500 gained 0.28% for its first up close on a Fed decision day since December 2025, and Chair Warsh said the Fed won't tolerate inflation above 2% and that politics played no role six days before the midterms. After the bell, the AI trade split: Microsoft rose more than 4% on Azure strength, while Alphabet fell about 6–9% and Fortinet dropped about 25%. Asia led earlier, with Korea's KOSPI surging 6.8% on SK Hynix's record profit.
- The S&P 500 gained 0.28% to 7,743.98, the Nasdaq Composite rose 0.27% to 26,549.85 and the Dow added 97.53 points (0.19%) to 52,475.10. That extends the S&P 500 and Dow to a third straight gain, building on Tuesday's closes of 7,722 on the S&P (+0.6%), 26,477 on the Nasdaq (+1.2%) and 52,377 on the Dow. Stocks bounced around after the decision, with the S&P 500 up as much as 0.46% before giving back gains and finishing higher. Fed funds futures had priced about a 93% chance of a hold, and the 10-year Treasury yield stood near 5.02% with the dollar index around 102.4. Since Warsh became chair in May, stocks had generally fallen on meeting days and risen the next day.
- The Fed kept rates unchanged and two members dissented in favor of an increase. At his press conference, Warsh said the Fed remains focused on price stability and that the employment picture has been "quite positive." He said he "didn't hear an utterance about politics" and that one of the Fed's eight meetings in 2027 will focus on longer-term strategy with no rate vote or statement. The two hawkish dissents keep a December hike in play, and September PCE (expected near 3.7%) and Q3 GDP arrive Thursday, alongside the ECB, with the Bank of Japan Friday.
- Earnings after the close split the AI trade. Microsoft rose more than 4% after fiscal first-quarter results beat on Azure strength, in a setup where the stock was up about 35% in three months. Alphabet fell roughly 6.5–8.6% as an earnings miss overshadowed Google Cloud revenue growth of about 103% and quarterly capex of $51.4 billion. Fortinet sank about 25% after hours, and Wendy's confirmed a buyout proposal from Trian. Amazon reports Thursday after the close, and Tuesday's session had already shown the market's focus on capex, with the Philadelphia Semiconductor Index up 3.6% while Boeing fell 10.7% on its results.
- Oil eased but stayed elevated: Brent near $111 and WTI around or just below $100 on Iran-talks hopes, with gold rebounding from $4,000. The AI funding worries that triggered October's chip sell-off have eased on a run of big financings, including Meta's $98 billion capital raise, SpaceX's $40 billion equipment finance lease and Anthropic's S-1 filing, which investors read as a sign capital is still available for AI buildout.
- Asia rallied on the chip rebound. South Korea's KOSPI surged 6.8% to 6,023.73, with SK Hynix up 11.4% after a record Q3 operating profit of 83.3 trillion won ($62.8 billion), up nearly sevenfold and above estimates, plus planned shareholder returns of 100 trillion won for 2026. Samsung Electronics rose 9.1% ahead of its Thursday report. Japan's Nikkei 225 gained 1.1% to 63,954.19, with Kioxia up 9.6% ahead of Friday's results, and Taiwan's Taiex rose about 2%.
- Greater China and the Pacific were steadier. The Hang Seng rose 0.23% to 23,094.83 as tech gains offset banks and property, and the Shanghai Composite added 0.5% to 3,666.50. Australia's S&P/ASX 200 gained 0.3% to 8,847.30 after September CPI came in at 4.3% (versus 4.2% expected) and Q3 trimmed-mean inflation at 3.7% (versus 3.6%), bolstering the RBA hike case. The Reserve Bank of New Zealand held at 2.75%, and the kiwi dollar fell below 0.56.
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