S&P 500 Hits Record Amid Earnings and Fed Watch/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ U.S. stock indexes continued rising to record highs on Tuesday, led by earnings gains from UPS and UnitedHealth. Investors await the Federal Reserve’s rate decision and trade talks between Trump and Xi. Meanwhile, Amazon announces layoffs while AI investments accelerate.
Market Momentum Quick Looks
- S&P 500 gained 0.3%, hitting another record.
- Dow Jones Industrial Average rose 298 points.
- Nasdaq Composite climbed 0.6% on tech optimism.
- UPS jumped 12% on stronger-than-expected earnings.
- UnitedHealth and PayPal also posted solid gains.
- Royal Caribbean and D.R. Horton saw declines.
- Amazon announced 14,000 job cuts amid AI shift.
- Federal Reserve decision on interest rates due Wednesday.
- Trump-Xi meeting could influence global trade outlook.
- Global markets showed mixed reactions across Asia and Europe.
Deep Look
U.S. Markets Hit Record Highs as Investors Eye Fed, Earnings Reports
U.S. stock markets continued their upward momentum Tuesday, reaching new record highs across all major indexes. The S&P 500 edged up 0.3%, while the Dow Jones Industrial Average surged 298 points. The Nasdaq Composite followed suit with a 0.6% gain, as investors responded positively to robust corporate earnings and positioned themselves ahead of key policy and geopolitical developments.
Gains were powered largely by strong performances from companies like UPS, which soared 12% after significantly surpassing Wall Street expectations for third-quarter revenue and earnings. The logistics giant also announced new cost-cutting strategies, further reassuring investors. Similarly, PayPal and UnitedHealth contributed to the rally with solid earnings results.
In contrast, some travel and housing-related companies faced losses. Royal Caribbean and homebuilder D.R. Horton saw their stocks slip, signaling uneven confidence in consumer discretionary sectors despite broader market optimism.
Focus on Amazon and AI Restructuring
Tech giant Amazon announced it will lay off approximately 14,000 corporate workers as part of a strategic cost-cutting initiative. CEO Andy Jassy revealed that the company is aggressively investing in generative artificial intelligence, which is expected to automate a significant portion of corporate operations in the coming years. Shares of Amazon climbed modestly by less than 1% following the announcement.
Federal Reserve Holds the Market’s Attention
Investor attention is turning toward the Federal Reserve, which is scheduled to announce its latest interest rate decision on Wednesday. The majority of market watchers expect the Fed to lower its benchmark interest rate by 0.25%, marking the second consecutive rate cut. The move is widely seen as a strategy to support the labor market amid signs of economic deceleration.
Still, uncertainty remains. Federal Reserve officials have indicated that if inflation accelerates again, future rate cuts may be reconsidered. Lower rates are designed to stimulate growth but can also exacerbate inflationary pressures if not managed carefully.
Big Tech Earnings Ahead
Wall Street is also preparing for a wave of earnings from tech giants this week. Alphabet, Meta Platforms, and Microsoft are all scheduled to report on Wednesday, with Apple and Amazon following on Thursday. These results will be crucial in determining whether the tech rally, which has fueled much of 2025’s market growth, has sustainable legs going into year-end.
Geopolitical Focus: Trump and Xi Set to Meet
Adding to the week’s significance, President Donald Trump is expected to meet Chinese President Xi Jinping during a Pacific Rim summit in South Korea. Markets are hopeful the two leaders will announce a renewed trade agreement that could reduce global economic tensions, particularly those stemming from ongoing tariff disputes.
Trump’s broader trip through Asia included a stop in Tokyo where he met with Japan’s new Prime Minister, Sanae Takaichi. Japan reaffirmed its military and trade commitments with the U.S., pledging to increase defense spending and imports of American goods.
Global Markets React
Markets in Asia and Europe showed mixed performance. Japan’s Nikkei 225 retreated by 0.6% after hitting recent highs, while Hong Kong’s Hang Seng fell 0.3%, and Shanghai’s Composite Index slipped 0.2% after briefly touching a decade-high of 4,000.
In Europe, France’s CAC 40 and Germany’s DAX posted slight losses, dropping 0.1% and 0.2% respectively. Meanwhile, Britain’s FTSE 100 nudged up by 0.1%.
South Korea’s Kospi dropped 0.8% despite strong quarterly GDP growth, and Australia’s ASX fell by 0.5%.
Energy Prices Dip
In energy markets, U.S. crude oil prices fell by 83 cents to $60.49 per barrel. Brent crude, the global benchmark, also declined by 83 cents to $64.08 per barrel, reflecting continued caution amid global economic uncertainty and supply considerations.
You must Register or Login to post a comment.