Finance

Will the Fed’s Rate Decision and Trump’s Trade Talks Disrupt the Stock Market’s Record-Breaking Rally?

Stocks paused before the Fed’s rate decision, Big Tech earnings, and trade talks, while gold prices fell.

byAndres Castro

October 28, 2025, 11:20 AM

The Federal Reserve logo with a photo of Chair Jerome Powell. By El editorial / Shutterstock.com.

Executive Summary

US stock market futures remained largely flat after a record-breaking rally, with the S&P 500 closing at an all-time high above 6,800.

Investors are anticipating the Federal Reserve’s decision, widely expecting a second interest rate cut for 2025 and seeking indications for a potential third cut in December.

Attention is focused on upcoming earnings reports from the ‘Magnificent Seven’ tech giants and developments in President Trump’s trade negotiations, including a new agreement with Japan and optimism for a US-China breakthrough.

The Story So Far

The current market pause and investor anticipation stem from three key factors: the Federal Reserve’s ongoing policy meeting, where a second interest rate cut for 2025 is widely expected amidst mixed economic signals; the imminent release of earnings reports from major ‘Magnificent Seven’ technology companies, which significantly influence the S&P 500; and developments in President Trump’s trade negotiations, particularly optimism for a potential US-China breakthrough following a new agreement with Japan.

Why This Matters

This week’s convergence of a potential Federal Reserve interest rate cut, pivotal Big Tech earnings, and progress in President Trump’s trade negotiations will be critical in determining whether the stock market’s record rally can sustain its momentum. While a rate cut could further stimulate the economy and trade breakthroughs might reduce uncertainty, the performance of the ‘Magnificent Seven’ and Amazon’s significant layoffs will offer a crucial read on corporate health, collectively dictating market direction through year-end.

Who Thinks What?

Investors are largely pausing after a record rally, awaiting crucial events such as the Federal Reserve’s interest rate decision, major Big Tech earnings reports, and updates on President Trump’s trade negotiations, while showing signs of returning risk appetite.

The Federal Reserve is widely anticipated to implement a second interest rate cut for 2025 following its two-day policy meeting.

President Trump is actively engaged in international trade, having signed a new agreement with Japan and contributing to growing optimism for a potential US-China trade breakthrough.

US stock market futures remained largely flat early Tuesday, pausing after a record-breaking rally on Wall Street, as investors awaited a crucial week featuring a Federal Reserve interest rate decision, major Big Tech earnings reports, and updates on President Trump’s trade negotiations.

Market Performance

Dow Jones Industrial Average futures slipped approximately 0.1%, while S&P 500 futures remained steady. Nasdaq 100 futures edged up by 0.1%, following Monday’s session where the S&P 500 closed above 6,800 for the first time, marking an all-time high.

Federal Reserve Meeting

The Federal Reserve began its two-day policy meeting on Tuesday, with traders widely anticipating a second interest rate cut for 2025. This decision comes amidst mixed labor data and an ongoing government shutdown, which has temporarily limited key economic data releases. Markets are also looking for indications from Fed Chair Jerome Powell regarding a potential third rate cut in December.

Big Tech Earnings and Amazon Layoffs

Attention is also fixed on upcoming earnings reports from the ‘Magnificent Seven’ technology giants, including Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. These companies collectively account for nearly a quarter of the S&P 500’s value. Separately, Amazon confirmed plans to lay off up to 30,000 corporate workers, reportedly the largest job reduction in its history, ahead of its third-quarter earnings report.

Trade Relations

Investors also monitored developments in international trade, particularly President Trump’s engagements. In Tokyo, President Trump signed a new agreement focused on rare earths and defense cooperation with Japan’s new Prime Minister Sanae Takaichi. This visit contributed to growing optimism for a potential US-China trade breakthrough ahead of President Trump’s anticipated meeting with Chinese President Xi Jinping later this week.

Gold Prices Decline

Concurrently, gold prices experienced a sharp decline as investor risk appetite showed signs of returning. COMEX Gold December futures fell 2.6% to $3,915.10 per ounce, breaking below the $4,000 mark. This drop followed a nine-week winning streak that had propelled prices to a 40-year high earlier in the month.

Market Outlook

The week presents a confluence of critical market drivers, from monetary policy and corporate performance to international trade dynamics. With major indexes hovering near record highs, the outcomes of the Federal Reserve meeting, key tech earnings, and President Trump’s trade discussions are poised to significantly influence market direction through the end of the year.