Markets are pricing in a broad rally accompanied by record high stocks, falling bond yields and the weakest dollar in two months ahead of the two-day Fed meeting. A 0.25% interest rate cut on Wednesday is almost entirely priced in.
Political pressure & market pulse
- Stephen Miran’s narrow confirmation to the Fed Board of Governors and the Lisa Cook appeals process brought the White House influence to the forefront. Trump’s call for a “bigger rate cut” and his intention to replace Powell in May 2026 are increasing pressure on the bank’s corporate independence.
- Gold hits new record highs while offshore yuan reaches year’s peak on positive signals from US-China Madrid talks.
Stocks: Mega-caps are driving
- Tesla rose 3.6%; filings indicated that Elon Musk bought shares worth approximately $1 billion.
- Alphabet surpassed $3 trillion market capitalization; Nvidia lagged behind amid news of an competition investigation in China.
- S&P 500 futures were higher before Tuesday’s open; “The Magnificent Seven” funds are up 16% in 2025.
Macro & geo-economics
- A framework agreement for the transfer of TikTok to US control may be clarified on Friday with the Trump-Xi meeting; Trade truce may extend beyond November.
- Employment and wage growth slow in the UK; ZEW’s September update shows a surprising strengthening of German investor confidence.
Agenda & data flow
Trump’s visit to Britain is also on the agenda.
USA: August imports/import prices, retail sales, industrial production, NAHB housing index, business/retail inventories.
Canada: Housing starts, CPI.
Treasury: $13 billion sold in 20-year tender.
Fed FOMC: Two-day meeting begins today, decision Wednesday.
