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Thursday, October 29, 2026
What’s happening: US stocks closed higher on Wednesday as investors responded to the latest corporate earnings releases.
What happened: The Federal Reserve kept its key policy rate unchanged at the latest meeting, in-line with market estimates.
The decision raised speculation of a rate hike in December, while investors await some key economic reports.
Why it matters: As widely expected, the Federal Reserve held its benchmark interest rates in range of 3.75% to 4.00% on Wednesday. The decision was not unanimous, as two officials voted for a hike.
The Fed upgraded its outlook for the US economy in its latest policy statement while noting that inflation continues to remain elevated. Speaking at the press conference, Fed chief Kevin Warsh noted that real growth was tracking toward 3%, driven by resilient consumer spending and broad-based business and AI investments.
Warsh reinforced the central bank’s hawkish stance, emphasising that policymakers were fully prepared to act as necessary.
Investors responded by raising speculations of an interest rate hike at the Fed’s next policy meeting in December.
Corporate earnings remained in focus. SK Hynix reported record profits for the latest quarter, providing a boost to chip stocks like AMD and Micron. Shares of Oracle and Seagate Technologies also rallied on earnings and outlook.
Microsoft and Alphabet reported earnings after the closing bell on Wednesday. Shares of Microsoft climbed around 3% in after-hours trading following better-than-expected quarterly results, while Alphabet’s stock fell 10% on an earnings miss.
Around 200 companies in the S&P 500 have released earnings results, of which 84% have topped market expectations. Analysts expect aggregate third-quarter S&P 500 earnings to surge 31.8% year-over-year, compared to 30.6% as of October 1.
The Dow Jones index rose 0.19% to close at 52,475.10 on Wednesday, while the S&P 500 climbed 0.28% to 7,743.98. The Nasdaq 100 jumped 161.71 points, or 0.55%, to settle at 29,813.16.
What to watch: Investors await the release of economic data on Personal Consumption Expenditures (1630 UAE Time), the central bank’s preferred inflation gauge, and an advance reading on third-quarter GDP (1630 UAE Time).
The US core PCE price index, which rose 3% year-over-year in August, is expected to surge 3.1% in September. Analysts expect the US economy to grow at an annualised rate of 3.2% in the third quarter, following a 2.2% gain in the second quarter.
Context: The GBP/USD forex pair rose this morning as investors responded to UK Chancellor John Healey’s budget announcement.
Details: Healey pledged his commitment to fiscal discipline against the challenging macro backdrop. The UK Chancellor confirmed a projected fiscal headroom (government’s buffer to trigger public spending or cut taxes) of £15 billion for the 2029-2030 fiscal year. This came in-line with market expectations.
Key fiscal proposals included energy bill subsidies, temporary tariff eliminations across more than 100 supermarket items and a 3.9% gain in the minimum wage. The government budget also allocated an additional £20.4 billion toward the National Wealth Fund and the British Business Bank, aiming to support investment.
Meanwhile, the Office for Budget Responsibility (OBR) trimmed its 2027 GDP growth outlook for the UK economy to 1.0% from its previous projection of 1.6%, citing energy supply disruptions tied to the conflict in Iran. Conversely, the 2026 growth outlook was raised from 1.1% to 1.2%.
Data released this morning showed that UK’s car production jumped by 38.6% year-over-year to 70,831 units in September. This marked the strongest September production since 2023.
Weakness in the US dollar lent support to the GBP/USD forex pair this morning. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.1% to 102.11.
The GBP/USD forex pair rose around 0.1% to 1.3335 this morning.
What to watch: Data on UK’s mortgage approvals (1330 UAE Time), mortgage lending (1330 UAE Time), M4 money supply (1330 UAE Time) and net lending to individuals (1330 UAE Time) will be released today. Net mortgage approvals for UK house purchases, which declined to 54,900 in August, are expected to fall further to 54,000 in September.
Analysts expect net mortgage borrowing by UK individuals to decline to £4.2 billion in September from £4.4 billion in August. UK’s M4 money supply, which surged by 0.4% to £3,306 billion in August, is expected to rise by 0.3% in September.
Other Markets: Asian indices traded mixed this morning, with Japan’s Nikkei 225 and Hong Kong’s Hang Seng Index up by 0.21% and 0.12%, respectively, and the CSI 300 Index down by 0.99%.
US President Donald Trump said a meeting would soon be arranged between Russia’s President Vladimir Putin and Ukraine’s President Volodymyr Zelenskyy to end the ongoing war. The news sent the USD/RUB forex pair lower in forex trading this morning.
New Zealand’s ANZ Business Outlook Index climbed to 52.5 in October from 51.9 in the previous month, which lent support to the NZD/USD forex pair.
Australia’s export prices surged 1.4% in the third quarter, compared to a 1.1% gain in the previous quarter. This being the fourth straight quarter of rising export prices sent the AUD/USD pair higher in forex trading this morning.
The UAE’s central bank kept its overnight deposit facility base rate unchanged at 3.9%, which exerted pressure on the USD/AED forex pair.
The Hong Kong Monetary Authority left its base rate unchanged at 4.25% at its latest meeting, sending the USD/HKD pair lower in forex trading this morning.
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