Executive Summary
The Story So Far
Why This Matters
Who Thinks What?
The U.S. stock market experienced a mixed trading day on October 30, 2025, as a sell-off in major technology firms weighed on the S&P 500 and Nasdaq, while the Dow Jones Industrial Average posted gains. Investor sentiment was shaped by a series of significant events, including disappointing earnings reports from some Big Tech companies, cautious remarks from Federal Reserve Chair Jerome Powell, and a partial tariff truce following a meeting between President Donald Trump and China’s Xi Jinping.
Market Performance Overview
The S&P 500 declined by 0.3% to 5,018, and the Nasdaq Composite slid 0.6% to 15,170. This downturn was largely driven by steep losses in Meta Platforms and Microsoft. Meta tumbled 11% after increasing its capital spending forecast for AI expansion, while Microsoft slipped 2% despite a 40% surge in Azure revenue. Conversely, Alphabet shares soared 5% following stronger-than-expected earnings, reporting $3.10 EPS and $102.35 billion in revenue, driven by strong Google Cloud and YouTube ad performance.
In contrast, the Dow Jones Industrial Average advanced by 179 points, or 0.4%, to 39,310. This gain was attributed to strength in the banking and healthcare sectors, signaling a rotation out of megacap technology stocks. JPMorgan and Bank of America both climbed over 1%, while Eli Lilly jumped 5% after raising its 2025 revenue outlook on strong demand for its drugs Zepbound and Mounjaro. Comcast and Restaurant Brands International also saw gains after reporting solid quarterly results.
Federal Reserve Stance
Markets also reacted to comments from Federal Reserve Chair Jerome Powell, who warned that a December rate cut is “not a foregone conclusion,” despite the central bank having just trimmed rates by 0.25%. Chris Maxey of Wealthspire Advisors noted that Powell’s remarks “spooked markets,” while Wharton professor Jeremy Siegel suggested the caution would “slow down the bull market, not stop it.” Siegel emphasized the importance of upcoming economic data, particularly holiday spending amid new tariffs, in guiding the Fed’s next move.
U.S.-China Trade Developments
On the geopolitical front, President Donald Trump and Chinese President Xi Jinping concluded their meeting with a partial tariff agreement. President Trump announced a reduction in fentanyl tariffs to 10%, effectively decreasing overall Chinese import duties to 47% from 57%. In return, China committed to halting fentanyl exports, increasing purchases of American soybeans and farm goods, and delaying rare earth export restrictions by one year. Shares of rare earth miners MP Materials and USA Rare Earth rallied on the news, though uncertainty remains regarding Nvidia chip exports and TikTok’s U.S. divestment, for which Beijing offered no timeline.
Market Outlook
The day’s trading highlighted a discernible split in market performance, with tech-heavy indices facing headwinds from earnings and investor caution, while the Dow benefited from a rotation into more traditional sectors. Analysts suggest Wall Street could remain choppy as it digests earnings, trade deals, and monetary signals. Despite the recent dips, major indices remain close to all-time highs, underscoring resilient investor sentiment tempered by macroeconomic uncertainty.
