Close on October 29: U.S. stock market indexes closed higher, with the S&P 500, Dow Jones, and NASDAQ all seeing three consecutive gains
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U.S. stock market indexes closed higher on Wednesday, with the S&P 500, Nasdaq, and Dow Jones all recording three consecutive gains. The Federal Reserve maintained its interest rates unchanged, and the market continued to focus on tech company earnings reports, AI trading, as well as the U.S. Treasury Department's refinancing arrangements for next week.
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U.S. stock market indexes closed higher across the board, with the S&P 500 index rising 0.28% to close at 7,743.98 points; the Nasdaq index rose 0.27% to close at 26,549.85 points. The Dow Jones Industrial Average increased by 97.53 points, or 0.19%, to close at 52,475.10 points.

The Federal Reserve maintained the interest rate target range between 3.75% and 4% unchanged. Traders had widely anticipated this move beforehand. According to CME FedWatch tools, before the Wednesday meeting, futures trading on federal funds indicated that the probability of the central bank maintaining the current interest rate was close to 93%.

Chairman Kevin Walsh stated at the press conference following the decision that, despite the suspension of actions, the central bank remains focused on "price stability," and the employment situation has been "quite positive."

"There is nothing today that rules out the possibility of another 25-basis-point interest rate hike before the end of the year," said Jeff Schultz, chief investment strategist at Franklin Templeton Investments. "The key issue for the market is the pace of tightening, and it seems that the committee is content to reverse last year's interest rate cuts in a measured manner, which is more favorable for risk assets from a historical perspective."

Oracle, a software company, saw its stock price rise by more than 11%. Previously, the company provided revenue forecasts of $225 billion for the fiscal year 2030, which represents an annual growth of 35%. The company also stated that it will limit additional financing between the fiscal years 2027 and 2030 to $20 billion.

Chip stocks also rose on Wednesday, boosted by SK Hynix announcing record quarterly profits – this development caused the American stock price of this South Korean chip manufacturer to rise by 13%. Micron Technology rose by 4%, Arm Holdings rose by 3%. Marvell Technology rose by more than 2%, and Advanced Micro Devices rose by about 2%.

Investors' attention will still be focused on artificial intelligence trading after the market closes, as Alphabet among the "Big Seven of U.S. Stocks" and Microsoft will announce their latest quarterly results. The former has risen by more than 1% recently, while the latter has fallen by nearly 1%.

Tech stocks, especially those related to the construction of AI, have been struggling in recent weeks due to doubts about technical financing.

"The recent cycle is still very healthy," said Bill Nossi, head of investment at Bank of America's Asset Management Group. "The real question is whether it can continue for many years, and what returns those who make large investments today can expect. Will it be a generally profitable endeavor, or will there start to be some winners and losers? We tend to think it will be the latter."

In recent weeks, affected by concerns regarding the financing of AI, tech stocks, especially those heavily involved in the construction of AI, have been under pressure. However, Mike Wilson, Morgan Stanley's chief U.S. equity strategist, believes that this round of tech stock pullbacks may be coming to an end.

Across the ocean, the Pan-European Stoxx 600 index in Europe fell by 0.27%; the UK's FTSE 100 index fell by 0.33%; France's CAC40 index fell by 0.13%; Germany's DAX index fell by 0.11%.

In the Asian market: Japan's Nikkei 225 index closed up 1.08%; South Korea's KOSPI index soared 6.63%; Australia's S&P/ASX 200 index remained relatively flat; China's mainland CSI 300 index closed up 0.85%.

Bank of America sees interest rate hikes against the trend.

Bank of America stated that the Federal Reserve has sufficient reasons to raise interest rates in October. If no action is taken in October, the Fed will only have one option left; if interest rates are raised in October, it will retain the flexibility to continue raising rates in December, aligning the interest rate hike cycle more closely with the expectations for rate cuts in 2024 and 2025.

Given that inflation data is more threatening, the latter option holds greater strategic value.

A financing gap of $4.1 trillion is looming, and the real highlight of the U.S. debt situation will occur next week.

JPMorgan is in line with market consensus. Jay Barry and others from JPMorgan's fixed-income strategy team indicate that they expect the Federal Reserve to remain inactive, but there may be more than one dissident vote from the hawks. However, Cleveland Fed Chair Loretta Harker and Dallas Fed Chair Robert Kaplan are expected to cast hawkish dissenting votes, and there is also a risk that Minneapolis Fed Chair Neel Kashkari may join them.

For the U.S. debt market, however, the Treasury Department's quarterly refinancing announcement next week is the real highlight. The Treasury Department will release its quarterly financing estimates on November 2nd and the full refinancing announcement on November 4th.

JPMorgan Chase expects the scale of interest-bearing bond auctions to remain unchanged. The fundamental figures are as follows: a deficit of $1.992 trillion for the fiscal year 2026, which is only $28 billion narrower than the bank's forecast; the deficit forecast for fiscal year 2027 remains at $1.960 trillion. According to the current auction arrangements, there is a funding gap of up to $4.1 trillion from 2027 to 2030. The report argues that reducing long-term auctions to lower yields lacks structural significance and will only shift the financing pressure to short-term bonds.

Pro-American countries saw a sharp 60% decline in US debt purchases in the first eight months; Japan saw a plunge of 99%, while South Korea recorded a record net sale.

According to data from the U.S. Treasury Department and the State Department, in the first eight months of 2026, countries and regions that align closely with the U.S. stance purchased a net amount of $174.3 billion in U.S. medium- and long-term government bonds, excluding short-term treasury bills, marking a new low since the same period in 2021, with a year-over-year decline of over 60%.

This shift is particularly notable in Asia, where economies that have maintained large trade surpluses for years are reducing their allocation of surplus funds to U.S. Treasury bonds.

Japan is the largest overseas holder of U.S. debt, but in the first eight months of this year, it only made a net purchase of $389 million, a sharp decrease of 99% compared to the same period last year; South Korea sold a net $23.8 billion, setting the highest level of reduction since statistics began in 1977; Taiwan Province of China is also in a state of net selling.

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