Wall Street Eyes Earnings Reports and Fed Decision as Market Risks Grow
Despite the ongoing government shutdown, Wall Street has shown resilience, setting new all-time highs earlier this month. However, the next few weeks could bring significant volatility as quarterly earnings reports begin and U.S.-China trade relations continue to deteriorate.
“We’ve mentioned on previous reports Wall Street seemed unconcerned with the government shutdown setting new all-time highs early on. The next few weeks could change that, with quarterly earnings reports and U.S.-China relations reaching a new low.”
Investors are now shifting focus to corporate earnings, particularly from financial institutions. Early reports are expected from banks and financial firms, while major agriculture companies will report later in the month.
“Most reports on earnings are banks and financial-related companies early on, major ag companies report later in the month.”
Next week’s earnings calendar features key players across multiple sectors, including the CME Group, Dow Chemical, and two major railroads—CSX and Union Pacific.
“But next week’s calendar does include the CME Group and Dow Chemical, also CSX and Union Pacific Railroads.”
As for monetary policy, investors continue to watch the Federal Reserve closely. The CME FedWatch Tool still shows a strong probability of a rate cut this month.
“Speaking of the CME Group, CME FedWatchTool still shows a 92-94% chance the Fed will cut interest rates on the 29th.”
However, recent commentary from Federal Reserve Chairman Jerome Powell suggests caution. His remarks last week were interpreted as guarded, possibly signaling hesitation to cut rates aggressively.
“Fed Chairman Powell was considered very guarded in a speech last week regarding the Fed’s direction, and CME has backed off a little on their projection for a rate cut in December, now down to 80%.”
With uncertainty growing around U.S.-China negotiations and a mixed outlook for rate policy, investors should prepare for a potentially bumpy October. The combination of earnings, geopolitics, and Fed decisions will likely drive market sentiment heading into the final quarter of the year.
Audio Reporting by Mark Oppold for Southeast AgNet.