Federal Reserve holds rates steady as tech earnings loom

The Federal Reserve is widely expected to hold rates steady today as investors weigh persistent inflation tied to AI-driven demand, while major tech giants report earnings after the bell. The outcome will set the tone for markets heading into the midterm elections and shape expectations for monetary policy through year-end.

• Federal Reserve to announce rate decision at 2pm ET, with policymakers expected to keep rates unchanged.
• Alphabet and Microsoft will report third-quarter earnings after market close today.
• Treasury Secretary Scott Bessent joins CNBC at 4pm ET to discuss the economy and midterms.

• 30% Jump in UBS pretax profit for the quarter versus prior year
• $2.2T Deutsche Bank assets under management, following record profit quarter
• $3.2B Jio Platforms IPO raise in India, largest ever in the country
• 20% Jio Platforms share spike on first day of trading in India

CNBC reported that markets are preparing for twin catalysts on Wednesday (October 28): a monetary policy decision from the Federal Reserve and earnings announcements from two of the world’s largest technology companies. Inflation remains the central focus for policymakers, who have cited strong demand for artificial intelligence services as a driver of price pressures alongside energy costs. Futures are trading near flat as investors adopt a cautious stance ahead of the afternoon’s announcements, with the Fed widely expected to maintain its current interest rate target.

Fed decision expected to leave rates unchanged amid inflation concerns

The Federal Reserve will announce its decision at 2pm ET, with officials all but certain to hold borrowing costs steady. Inflation driven by the AI boom has factored prominently in recent policymaker communications, creating a backdrop of elevated price pressures even as the central bank maintains a holding pattern on rates.

Markets are bracing for what some observers view as a hawkish pause rather than a dovish one.

Alphabet and Microsoft set to report as earnings season accelerates

The main focus for technology stocks will arrive after the closing bell, with both Alphabet and Microsoft due to report third-quarter results. These two firms represent a substantial portion of the equity market’s gains this year, making their earnings guidance particularly important for investors assessing the durability of the artificial intelligence rally.

Asia delivered positive momentum overnight, with South Korea’s benchmark index climbing following strong results from SK Hynix. The chipmaker reported third-quarter operating profit that exceeded expectations and returned $25 billion to shareholders, underscoring robust demand for semiconductor capacity in the AI ecosystem.

European banks post strong results as Treasury Secretary prepares economic outlook

Swiss banking giant UBS reported a near 30% jump in pretax profit for the quarter, while German lender Deutsche Bank logged its third consecutive quarter of record profits with assets under management reaching $2.2 trillion. These results suggest robust activity in wealth management and investment banking despite macroeconomic uncertainty.

Treasury Secretary Scott Bessent will join CNBC’s Brian Sullivan at 4pm ET to discuss the fiscal outlook, economic conditions and the midterm elections.

In equity capital markets news, Jio Platforms, a firm backed by Meta and Google, surged more than 20% on its first day of trading in India after raising $3.2 billion in what marks the country’s largest-ever initial public offering. Separately, retail trading platform Robinhood saw its shares decline in late trading after missing earnings expectations, with the stock down almost 40% from its highs of last October as weakness in cryptocurrency trading volumes pressured profitability.

The BlockWest read. Investors should track the tone from Fed Chair Jerome Powell’s remarks at 2:30pm ET, not merely the hold itself. Messaging around future rate moves will prove as crucial as today’s decision for positioning in tech stocks and digital assets heading into the final weeks before the midterm elections, particularly given inflation concerns tied to AI infrastructure demand.

Watch for the Fed’s statement language on inflation and any shift in forward guidance. Powell’s characterization of price pressures and the economic outlook will signal whether the central bank views the current pause as temporary or the beginning of an extended holding period, a distinction that could reshape market expectations for 2027 monetary policy.

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