Fed Holds Steady as Trade Eases and Tech Earnings Impress
- QU Economics Research Team
- 1 day ago
- 6 min read
Market Weekly Commentary | Week of Nov 3rd, 2025
A Recap of Economic and Financial Trends from the Prior Week
By: Khadija Farooqi, The Quinnipiac University Global Economics Research Team
Last Week in Review
Fed delivers second rate cut of 2025, maintaining a cautious tone as data gaps and the government shutdown cloud the outlook.
AI and tech remain market drivers, with Nvidia’s $5T milestone and new chip launches from Qualcomm reinforcing leadership in next-gen innovation.
Consumer confidence holds firm in the U.S., eurozone inflation eases to 2.1%, and Japan’s Nikkei hits record highs on fiscal optimism.
Economic Recap
The Federal Reserve lowered its policy rate by 25 basis points to a range of 3.75%–4.00%, its second cut this year, while continuing to shrink its balance sheet—allowing bonds it holds to mature without reinvestment and gradually withdrawing liquidity from the financial system. The move signals that monetary policy remains supportive but not on automatic easing mode, reflecting a measured balance between lowering borrowing costs and maintaining financial discipline. Chair Jerome Powell explicitly stated that another rate cut in December “is not a foregone conclusion,” citing the ongoing government shutdown and limited data as reasons for caution. Meanwhile, consumer confidence rose to 94.6 in October and pending home sales were flat in September, suggesting that households remain resilient despite policy uncertainty. Abroad, the European Central Bank kept rates unchanged for a third consecutive meeting as euro-zone inflation slowed to 2.1% and GDP grew 0.2% in Q3. The U.K. housing market held up with a 0.3% price increase in October and mortgage approvals at a nine-month high.
Market Recap
Source: JPMorgan Asset Management, “Weekly Market Recap” (November 3, 2025).(Chart © JPMorgan Asset Management. Chart used under fair use for educational commentary by The Quinnipiac Global Economics Research Team.)
Major equity indexes ended the week mixed, reflecting a narrow, large-cap-driven rally led by technology stocks. The Nasdaq Composite advanced 2.25%, while the S&P 500 gained 0.72% and the Dow Jones Industrial Average added 0.75%. In contrast, smaller companies lagged, with the Russell 2000 down 1.35%. Growth stocks continued to outperform value, as the Russell 1000 Growth Index rose 1.79% versus a 0.85% decline for the Russell 1000 Value Index. In fixed income, Treasury yields climbed across most maturities following the Fed’s cautious tone, pressuring investment-grade credit. European equities finished modestly lower, with the STOXX Europe 600 (–0.67%) weighed down by shifting rate expectations, while Italy’s FTSE MIB (+1.62%) and the U.K.’s FTSE 100 (+0.74%) outperformed, supported by a weaker pound. Asian markets were broadly stronger, with Japan’s Nikkei 225 (+6.3%) reaching record highs on fiscal-stimulus hopes, and emerging markets outpaced developed peers, with the MSCI EM Index (+0.89%) rising more than the MSCI EAFE Index (–0.45%).
Calendar Events
Economic Data:
Nov. 3 (Mon): S&P Global U.S. Manufacturing PMI (Oct); ISM Manufacturing Index (Oct); Construction Spending (Sept); Auto Sales (Oct).
Nov. 4 (Tues): Job Openings (JOLTS, Sept).
Nov. 5 (Wed): ADP Employment Report (Oct); S&P Global Services PMI (Oct); ISM Services Index (Oct).
Nov. 6 (Thurs): Initial Jobless Claims
Nov. 7 (Fri): U.S. Employment Report (Oct); Unemployment Rate (Oct); University of Michigan Consumer Sentiment
Major Corporate Earnings:
Nov. 3 (Mon): Palantir Technologies (PLTR) Q3 2025; Advanced Micro Devices (AMD) Q3 2025
Nov. 4 (Tues): Uber Technologies (UBER) Q3 2025; Toyota Motor Corp (TM) Q2 2026
Nov. 5 (Wed): McDonald’s (MCD) Q3 2025; Qualcomm (QCOM) Q4 2025; Robinhood (HOOD) Q3 2025
Nov. 7 (Fri): KKR & Co (KKR) Q3 2025
**Note: Some releases are suspended due to the federal government shutdown.
Market Theme
AI & Technology Developments
The technology sector remained the market’s defining force as artificial intelligence spending and semiconductor innovation continued to drive performance. NVIDIA Corporation became the first company in history to close above a USD 5 trillion market capitalization. Expanding its ecosystem reach, NVIDIA announced a USD 1 billion equity investment in Nokia Corporation, acquiring a 2.9% stake through a directed issuance of roughly 166 million shares at USD 6.01 per share. The partnership aims to develop AI-native 5G and 6G radio-access-network (AI-RAN) infrastructure, a market projected to exceed USD 200 billion by 2030, as both companies position to accelerate the next generation of connectivity. Meanwhile, Qualcomm Incorporated unveiled two new AI inference chips (the AI200 and AI250) engineered for large-scale data centers with advanced liquid cooling, up to 768 GB of memory, and 160 kW rack-level power capacity, set to launch between 2026 and 2027.
Tech Earnings Snapshot
Third-quarter results from the largest U.S. technology firms painted a mixed picture of strength and selectivity within the sector. Meta Platforms reported revenue of $51.2 billion, up 23% year over year, but earnings per share of $5.16 fell short of the $6.70 consensus, as a $15.9 billion tax charge weighed on profits. Shares dropped more than 7% following the release amid concern over elevated AI capital spending. Amazon delivered stronger results, with revenue of $157 billion (up 12%) and earnings per share of $1.17 versus $0.84 expected, lifting its stock about 5%. These earnings came in after an announcement of 14,000 corporate job cuts earlier in the week. Apple also beat forecasts, posting EPS of $1.46 versus $1.39 expected, supported by a growing services business even as iPhone revenue softened. Meanwhile, Microsoft posted revenue of $77.7 billion (up 18%) and EPS of $3.72, exceeding estimates on sustained demand for cloud and AI integration. Alphabet reported revenue of $102.4 billion (up 16%) and EPS of $2.87 versus $2.29 expected, driven by strong performance in cloud services and digital advertising. Collectively, these results showed the continued dominance of mega-cap technology companies in both earnings growth and market leadership.
Chart of the Week
BlackRock Investment Institute, “Weekly Investment Commentary: Mega Forces Playing Out in Real Time,” November 3, 2025. (Chart © BlackRock Investment Institute, data from LSEG DataStream and China Customs. Chart used under fair use for educational commentary by The Quinnipiac Global Economics Research Team.)
China’s exports have surged to a record $3.74 trillion in 2025, marking the strongest net export contribution to GDP since the pandemic, even as trade tensions with the U.S. persist. The new Trump–Xi trade truce, reached last week, temporarily eased hostilities by pausing China’s rare earth export controls and delaying U.S. tariff hikes. Yet, President Trump simultaneously reaffirmed export restrictions on the most advanced Nvidia Blackwell AI chips, stating that “only U.S. customers will have access” to these technologies. Analysts at BlackRock note that the truce reflects “immutable economic laws” that prevent a full severing of supply chains: global manufacturers still depend on Chinese inputs for semiconductors, AI infrastructure, and electric vehicles. Much of the export momentum this year has been driven by front-loading of orders ahead of tariff deadlines. While China’s external sector remains a key stabilizer, domestic demand and property market weakness still weigh on growth, leaving policymakers reliant on export-led momentum to sustain the recovery.
Market Outlook
As investors enter November with eyes on the year’s final stretch, attention will center on the implications of the Federal Reserve’s cautious stance and the outlook for U.S. economic momentum heading into 2026. The brief U.S.–China trade truce has eased immediate tensions but is unlikely to alter the broader landscape of geopolitical and supply chain uncertainty. Domestically, household spending has remained resilient, and next week’s ISM Manufacturing and Services Indexes will provide an important gauge of business conditions and price trends as markets assess whether growth is stabilizing. Meanwhile, anticipation of larger 2026 tax refunds under the One Big Beautiful Bill (OBBBA) could add a modest cushion to disposable income early next year, potentially supporting consumption as monetary policy continues to ease. While this fiscal tailwind may temporarily bolster demand, it also risks rekindling inflation pressures in the first half of 2026.
Further Reading
Sources
CNBC. “Fed Meeting Today: Live Updates.” October 29, 2025.https://www.cnbc.com/2025/10/29/fed-meeting-today-live-updates-.html
J.P. Morgan Asset Management. “Weekly Market Recap.”https://am.jpmorgan.com/us/en/asset-management/adv/insights/market-insights/market-updates/weekly-market-recap/
CNBC. “Trump and Xi Reach Trade Truce in South Korea Over Rare Earth Tariffs and Tech.” October 30, 2025.https://www.cnbc.com/2025/10/30/trump-xi-south-korea-rare-earth-tariff-trade-war-nvidia.html
Yahoo Finance. “Trump Tariffs Live Updates: Trump Says China, Others Can’t Have Nvidia’s Top AI Chips.” November 3, 2025.https://finance.yahoo.com/news/live/trump-tariffs-live-updates-trump-says-china-others-cant-have-nvidias-top-ai-chips-162418691.html
T. Rowe Price. “Global Markets Weekly Update.”https://www.troweprice.com/personal-investing/resources/insights/global-markets-weekly-update.html
BlackRock Investment Institute. “Weekly Investment Commentary: Mega Forces Playing Out in Real Time.” November 3, 2025.https://www.blackrock.com/corporate/literature/market-commentary/weekly-investment-commentary-en-us-20251103-mega-forces-playing-out-in-real-time.pdf
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