Dow Dips as Fed Fears Slam Tech Stocks – Hot Economic Data Rattles Wall Street (Sept 25, 2025)
30 October 2025
5 mins read

Powell’s Hawkish U-Turn and Trump–Xi ‘Mini-Deal’ Leave S&P 500 Futures on Edge

  • Futures Mixed (Oct 30, early): U.S. stock futures opened mixed Thursday. By 4:23 a.m. EDT, Dow futures were down ~0.15%, S&P 500 futures up ~0.03%, and Nasdaq futures up ~0.04% [1]. In actual prices, E-mini S&P futures were near 6,880, only slightly below Wednesday’s close around 6,890 [2] [3].
  • Oct 29 Fed Move: The Fed cut its target rate by 25 basis points (to 3.75–4.00%) on Oct 29, as expected [4]. However, Chair Powell cautioned that a December cut is “not a foregone conclusion” [5], tempering the post-cut rally. Traders had priced in roughly two more cuts in 2025, but Powell’s tone pulled some of that forward expectation back [6] [7].
  • Oct 29 Market Close: On Oct 29, the Nasdaq closed at a new record high (23,958) while the S&P 500 was essentially flat – ending at 6,890.59 [8] [9] – and the Dow finished slightly lower (around 47,632). Investors were cautiously buying into the Fed’s dovish move, but Powell’s comments late in the session offset gains.
  • Trump–Xi Trade News: President Trump announced a one-year “mini-deal” with China, rolling back some tariffs (e.g. on rare-earth minerals and fentanyl-related imports) in exchange for China resuming U.S. soybean purchases [10]. Analysts view this as a tactical pause rather than a major breakthrough [11], but it did provide a relief rally in some sectors.
  • Big Tech Earnings (Oct 29–30): Nvidia jumped ~3% to about $207 on Oct 29 (approaching a $5 trillion market cap) [12] [13]. After the close, mixed results surfaced: Microsoft fell ~4% on an OpenAI-related charge, Meta plunged ~7–8% on a large tax liability, while Alphabet rose ~6–7% on strong ad sales [14] [15]. Apple and Amazon report results on Oct 30, which will further influence futures.
  • Global Markets: Asian shares were mixed: Japan’s Nikkei was roughly flat, while Hong Kong’s Hang Seng and China’s Shanghai Composite fell ~0.3–0.9% [16]. European futures (STOXX 600, FTSE 100) were essentially flat [17] ahead of Thursday’s ECB meeting. Currency markets saw the dollar rally slightly (yen at multi-month lows) after the Fed news and BOJ hold.
  • Oil, Gold & Crypto: Oil prices rose on Thursday: Brent was around $64.90 and WTI about $60.50 per barrel (buoyed by U.S. inventory draws) [18]. Gold eased from its October peak (~$4,300/oz) to about $3,970 [19] as trade optimism reduced safe-haven demand. Bitcoin hovered near $110,000, off its recent highs, dipping after Powell’s hawkish tone then bouncing on the Trump–Xi news [20].
  • Expert Commentary: Analysts stress that markets are parsing Fed policy versus underlying fundamentals. “Chairman Powell indicated that another rate cut is not a foregone conclusion,” noted Oliver Pursche of Wealthspire Advisors [21], warning that this trimmed some of the rally’s prior exuberance. Angeles Investments’ Michael Rosen said Powell’s remarks “took some shine off the market,” but he called the reaction “temporary,” citing strong corporate earnings as the ultimate stock catalyst [22].

Market Analysis

S&P 500 futures hovered near their recent highs on Thursday as Wall Street digested a tug-of-war between dovish Fed policy and new uncertainties. Early Oct 30 trading showed futures almost unchanged, mirroring Wednesday’s close around 6,890.59 [23]. Markets had rallied into Wednesday, with the Nasdaq hitting a fresh peak and the S&P near its own record, on hopes the Fed would continue cutting rates and on positive tech news. But Fed Chair Jerome Powell’s press conference after the Oct 29 meeting cooled those hopes.

At the Federal Open Market Committee (FOMC) meeting Oct 29, the Fed delivered a widely expected 25-basis-point rate cut [24] and signaled an end to quantitative tightening. Stocks initially jumped on the move, but Powell’s emphasis that any December cut “is not a foregone conclusion” sliced into the rally. Traders slashed their odds of a Dec cut from roughly 90% to about 70% in a matter of hours [25]. U.S. futures, which had been comfortably above fair value earlier, turned flat to slightly lower. In real-time, the S&P 500 index gave back its modest intraday gain after Powell spoke, closing essentially unchanged on Wednesday [26].

Analysts say the Fed is now data-dependent. U.S. government shutdowns have starved policymakers of fresh employment and inflation data [27], making Fed decisions murkier. “The lack of data is going to make it very hard to forecast where the Fed will be in six weeks’ time,” observed a BNY Mellon strategist [28]. In this environment, volatility is likely to remain elevated into year-end, as markets swing on every new clue about the policy path.

Big tech earnings added another layer of volatility. Nvidia’s late-day news on Oct 29 – a $3bn AI supercomputer contract with the U.S. Energy Department – sent its stock up ~3% to $207.04 [29], crowning it the first $5 trillion public company. That surge helped buoy Nasdaq futures (and in turn the broad market’s tech weighting). But investors also digested mixed reports from fellow megacaps: Microsoft and Meta flagged higher AI spending and one-time charges, dragging their stock prices down in after-hours trading, while Alphabet’s strong quarter pushed its stock about 6–7% higher [30] [31]. This bifurcated set of results kept S&P 500 futures locked in a tight range. Traders are now looking ahead to Thursday’s reports from Apple and Amazon to see if the ‘Magnificent Seven’ can deliver further upside or trigger a pullback.

Global market cues were muted. In Asia, Tokyo’s market was essentially flat overnight, whereas Hong Kong and Chinese shares lagged modestly [32]. The Trump–Xi “mini-deal” – which cut some U.S. tariffs in exchange for resumed Chinese soybean purchases – provided an initial lift to sentiment, but investors warned it was only a temporary reprieve. European futures barely budged; STOXX 600 futures held flat and FTSE futures were unchanged [33] as traders awaited the European Central Bank’s announcement later Thursday. Currency markets were calmer: the dollar strengthened slightly against major currencies after the Fed (and a BOJ hold), helping gold to retrace to about $3,970 despite a brief spike the previous day. Oil prices climbed on the bullish trade move and tighter supply signals [34].

With markets so richly valued (the S&P 500 now trades near 20× forward earnings), some strategists counsel caution even amid the rally. A recent TS2.Tech analysis noted many forecasters still see the S&P reaching ~7,000 by year-end if this year’s earnings growth continues and the Fed eases more [35]. Goldman Sachs, for example, now targets the S&P above 7,000 by December, citing strong tech profits and Fed support [36]. But other experts point out bubbles and stretch: JPMorgan’s Jamie Dimon warns parts of big tech “look bubble-like,” and valuations in segments like AI stocks are at decades highs [37].

Forecast: In the near term, many analysts still give stocks the benefit of the doubt. The combination of a still-strong economy, cooling inflation, and a Fed leaning toward easier policy is expected to underpin stock gains. Technicals remain benign: most U.S. indexes are at or near record highs, with breadth only slightly narrowing. Barclays and other firms note that as long as corporate earnings surprises remain positive, dips may be shallow. A small pullback could even be a buying opportunity for some. However, markets are “on tenterhooks,” says one macro strategist – any surprise in the next payrolls or CPI reports could quickly reverse the mood. Overall, the S&P 500’s fate over the coming days likely hinges on further Fed guidance and how the rest of Big Tech reports. Investors will also watch global developments (the ECB decision, the U.S. fiscal situation, and any fresh U.S.-China news) that could tilt sentiment.

Outlook: Right now, Wall Street remains cautiously optimistic. Futures suggest about two more Fed rate cuts are still expected by year-end [38]. If that plays out and earnings stay strong, the 2025 rally could continue. But Powell’s warning and lofty valuations inject uncertainty. As Oliver Pursche puts it, Powell “trimmed some of the prior exuberance” [39], and markets are carefully watching whether this pullback proves “temporary” – as Michael Rosen believes – or the start of a pause. Investors should prepare for continued swings in S&P futures, with key events like payrolls, inflation data and any Fed clues setting the tone.

Sources: Reuters market reports and commentary [40] [41] [42]; TS2.Tech analysis and news summaries [43] [44] [45]. All figures as of Oct. 30, 2025.

The S&P 500 Nears Record High | President Trump vs. Jerome Powell | AMD Stock | TFY #100

References

1. ts2.tech, 2. www.reuters.com, 3. www.kaohooninternational.com, 4. www.reuters.com, 5. www.reuters.com, 6. ts2.tech, 7. www.reuters.com, 8. www.reuters.com, 9. ts2.tech, 10. ts2.tech, 11. ts2.tech, 12. www.reuters.com, 13. ts2.tech, 14. ts2.tech, 15. www.reuters.com, 16. ts2.tech, 17. ts2.tech, 18. ts2.tech, 19. ts2.tech, 20. ts2.tech, 21. ts2.tech, 22. ts2.tech, 23. www.reuters.com, 24. www.reuters.com, 25. www.reuters.com, 26. www.reuters.com, 27. www.reuters.com, 28. www.reuters.com, 29. www.reuters.com, 30. ts2.tech, 31. www.reuters.com, 32. ts2.tech, 33. ts2.tech, 34. ts2.tech, 35. ts2.tech, 36. ts2.tech, 37. ts2.tech, 38. ts2.tech, 39. www.reuters.com, 40. www.reuters.com, 41. www.reuters.com, 42. www.reuters.com, 43. ts2.tech, 44. ts2.tech, 45. ts2.tech

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