Vance writes to Iran hard-liner Rezaei to revive talks as Trump weighs new strikes
Alphabet Q3: Google Cloud revenue jumps 103% but search and ad sales miss forecasts
Microsoft Q1 beats as Azure grows 48% and capex lands $6bn below forecast
The before and after. A look at the changes in forex, rates, stocks through the FOMC decision and press conference.
Fed Chairman Kevin Warsh: More information will help determine appropriate policy steps
The full statement from the October 2026 FOMC rate decision
FOMC decision Oct 28: Rates left unchanged
Iran’s Araghchi: Iran continues to give diplomacy a chance to succeed
Crude oil extends to a session high of $103.53 as Iran concerns keep buyers in control
BOC’s Macklem: Our surveys show businesses are planning to pass on more of these cost increases
The weekly oil inventory data shows a drawdown of -1.892M vs expectations of a 0.015M build.
The full statement from the Bank of Canada rate decision for October 2026. Hikes by 25 basis points
Bank of Canada rate decision: Hike to 2.50%
UK budget: Growth forecasts cut as Healey unveils £15 billion fiscal buffer
US Wholesale inventories 0.6% vs 0.5% estimate
US September advance goods trade balance -134.9 billion vs -130.2 billion expected
Morning Kickstart: Dollar mixed ahead of Fed, BoC and Big Tech earnings
investingLive European session wrap: Stocks tread cautiously as Fed decision and big tech earnings loom
The Fed left rates unchanged, with Chair Warsh delivering a clear message: Inflation remains too high, but the committee believes policy is starting to work and wants more information before deciding what comes next.
That gave markets room to scale back the urgency of another immediate hike without embracing a move toward rate cuts. The dollar weakened during the decision and press conference, although its full-day performance remained mixed. Treasury yields told the more interesting story: the 2-year yield declined while longer yields rose, steepening the curve. U.S. stocks posted modest gains, while oil remained above $100, but did come off the high that reached $103.55 and gold advanced despite higher longer-term yields. InvestingLive’s before-and-after Fed comparison highlighted that divergence. investinglive.com
After the closing bell, the focus shifted to earnings. Microsoft beat expectations, led by strong Azure growth. Alphabet delivered stronger-than-expected cloud revenue, but earnings, total revenue and several advertising measures fell short. Microsoft shares are trading higher by 4.31%, while Alphabet are going the other way with tumbling by nearly 10%.
Foreign exchange: Dollar mixed as central-bank differences stand out
The dollar ended mixed. It was strongest against the New Zealand dollar and weakest against the Australian dollar.
EURUSD: 1.1155, +0.30%.
USDJPY: 157.94, unchanged.
GBPUSD: 1.3325, +0.17%.
USDCHF: 0.8282, −0.10%.
USDCAD: 1.3992, −0.40%.
AUDUSD: 0.7055, +0.44%.
NZDUSD: 0.5626, −0.95%.
The EURUSD moved off the double bottom at 1.1113 and has extended to the falling 100 hour MA at 1.11746. That MA will be the upside target to get to an through along with the 200 hour MA to tilt the short term bias higher. Absent that, and the sellers are in full control.
The contrast between Australia and New Zealand was particularly clear. Hotter Australian underlying inflation reinforced expectations for additional RBA tightening. The price of the AUDUSD is trading above and below the key 200 day MA going into the end of day close at 0.7055.
The RBNZ, meanwhile, unexpectedly held its policy rate at 2.75% in a narrow 4–3 vote, disappointing traders positioned for a hike and weighing on the kiwi. investinglive.co m. Nevertheless, the price of the NZDUSD is off the low and trading near a swing area target betwwen 0.5625 to 0.5633.
The Canadian dollar strengthened alongside a 25-basis-point Bank of Canada rate increase to 2.50% . The bank warned that inflation was becoming more persistent but said uncertainty warranted proceeding carefully with any additional tightening. investinglive.com
U.S. Treasuries: Short yields ease, long yields rise
The end-of-day readings for the US debt market shows:
2-year: 4.7245%, down 1.25 basis points.
5-year: 4.8657%, up 2.37 basis points.
10-year: 5.0404%, up 4.74 basis points.
30-year: 5.3577%, up 5.27 basis points.
The curve steepened as the front end found some relief from Warsh’s willingness to wait, while longer maturities remained under pressure.
That distinction matters. Less urgency for another near-term hike does not automatically translate into lower borrowing costs across the economy. With the 10-year yield above 5% and oil above $100, longer-term rates continued to present a challenge for housing, business financing and equity valuations.
U.S. stocks: Modest gains, with Nasdaq 100 leading
The closing levels for the major stocks indices are showing gains across the major benchmarks led by the Nasdaq 100 and the small cap Russell 2000.
Dow industrial average: 52,485.24, +101.99 points or +0.19%.
S&P 500: 7,744.38, +21.78 points or +0.28%.
Nasdaq Composite: 26,549.85, +72.04 points or +0.27%.
Russell 2000: 2,830.51, +11.64 points or +0.41%.
Nasdaq 100: 29,813.16, +161.72 points or +0.55%.
The Nasdaq 100 led, followed by the Russell 2000. Stocks absorbed both the Fed’s continued inflation concerns and the rise in longer-term yields without a broad retreat.
Major corporate news: Microsoft beats; Alphabet’s cloud strength offsets only part of the weakness
After the close, Microsoft and Alphabet released their recent earnings.
Microsoft’s fiscal Q1 report exceeded the supplied expectations:
EPS: $4.92 versus $4.72 expected.
Revenue: $92.3 billion versus $90.6 billion expected.
Operating income: $45.9 billion versus $44.1 billion expected.
Net income: $36.6 billion versus $35.1 billion expected.
Azure revenue growth, excluding currency effects: 48.0% versus 44.8% expected.
Microsoft also reported cloud revenue of $63.9 billion. Azure’s growth provided an encouraging signal for cloud demand and the monetization of AI-related services.
Alphabet’s Q3 results were more uneven:
EPS: $2.12 versus $3.03 expected.
Revenue: $127.6 billion versus $127.91 billion expected.
Operating income: $40.58 billion versus $43.16 billion expected.
Google Cloud revenue: $30.71 billion versus $29.1 billion expected.
Search and other revenue: $63.35 billion versus $64.85 billion expected.
YouTube advertising revenue: $11.21 billion versus $11.43 billion expected.
Capital expenditures: $51.36 billion versus $55.78 billion expected.
Cloud was Alphabet’s clear bright spot, but the broader revenue and operating-income misses left a more cautious message. The reports gave investors contrasting results to assess heading into the next session. Confirmed after-hours stock reactions were not supplied.
European stocks: Germany gains; Spain and Italy lag
European markets finished mixed:
Germany’s DAX: 25,704.03, +113.25 points or +0.44%.
France’s CAC 40: 7,886.97, −0.18 points, essentially unchanged.
U.K.’s FTSE 100: 10,694.49, +7.94 points or +0.07%.
Spain’s IBEX 35: 18,883.51, −277.08 points or −1.45%.
Italy’s FTSE MIB: 49,824.31, −196.37 points or −0.40%.
Germany led the supplied major benchmarks, while Spain was the clear underperformer. The uneven finish showed that Europe had little shared direction ahead of the Fed announcement and U.S. technology earnings.
Fed: Inflation target unchanged, December decision open
Warsh reinforced the 2% PCE inflation objective, making clear that there is no softer target. Near-term inflation expectations have risen, but longer-term expectations remain consistent with confidence in the Fed’s ability to restore price stability.
His economic assessment was constructive. Growth has strengthened, employment conditions remain healthy, and business investment is broadening. He also emphasized that improving productivity could allow stronger growth without an equivalent increase in inflation pressure.
The press conference left the Fed in a hold-and-assess position. Warsh declined to prejudge December and described the coming period as information rich. Another hike remains possible, but there was no commitment to deliver one and little indication of urgency to cut. investinglive.com
Crude oil and the Middle East: Diplomatic hopes meet unresolved risks
U.S. crude traded at $101.49, up $1.28 or 1.28%, in the supplied end-of-day snapshot.
Late headlines offered some encouragement on diplomacy. The Wall Street Journal reported that Vice President Vance had contacted an Iranian hard-liner in an effort to restart peace talks.
NewsNation separately reported substantial exchanges between Iran and the U.S. through mediators over a seven-day proposal intended to prevent a return to military operations after the U.S. midterm elections. Its source described discussions as positive but stressed that nothing had been finalized.
The reporting also remained contradictory. NewsNation’s source disputed earlier reports that the U.S. had informed Gulf allies about a short, intense military campaign after the elections. Traders were therefore left weighing diplomatic progress against the continuing risk of renewed strikes.
On inventories, the weekly EIA report showed crude stocks falling by 1.892 million barrels versus a small build expected. Distillates also declined, but a surprise 3.870-million-barrel gasoline build tempered the otherwise supportive inventory figures. investinglive.com
Oil’s continued elevation keeps the inflation implications of the conflict firmly in focus.
Gold and silver: Gold advances despite higher long yields
Gold traded near $4,077.99, up $17.66 or 0.43%. Silver stood at $54.4436, up $0.0380 or 0.07%.
Gold’s advance came despite the rise in longer-term Treasury yields, which would normally create a headwind. The dollar’s post-Fed retreat and the decline in the 2-year yield offered a supportive counterweight. The mixed full-day dollar performance, however, makes it difficult to attribute the gain to one factor.
Silver posted only a marginal advance, showing less enthusiasm than gold.
Bitcoin: Higher alongside equities
Bitcoin traded at $81,608, up $797 or 0.99%.
Its advance was consistent with the positive tone in equities. No separate crypto-specific catalyst was established in the available material.
The overall takeaway
The Fed is willing to wait, but inflation remains the constraint. The next session starts with longer-term Treasury yields still elevated, contrasting Microsoft and Alphabet earnings to digest, and Middle East negotiations that have yet to deliver an agreement. Oil remains a key link between the geopolitical headlines and the interest-rate outlook.
This article was written by Greg Michalowski at investinglive.com.
