Wednesday preview: Fed rate cut, US tech earnings eyed

(Sharecast News) - All eyes will be on the latest policy announcement from the US Federal Reserve on Wednesday, as well as a raft of earnings from US tech giants. Nearly a month into the government shutdown, the Fed is widely expected to cut rates by 25 basis points.

ING said: "Given decent economic growth, elevated inflation, low unemployment and equity markets at all-time highs, you could be forgiven for questioning why the market is fully discounting a 25bp interest rate cut on Wednesday, with another 25bp cut priced in for December.

"Well, the Federal Reserve resumed cutting interest rates at the September FOMC meeting after a nine-month hiatus, which Chair Jerome Powell characterised as a 'risk management' move. Above-target inflation is a problem, and tariffs continue to pose a threat, but it's fair to say tariff-induced price hikes are not coming through as aggressively as feared.

"The more pressing issue is the deteriorating jobs market, with a clear chance that the 'low hire, low fire' economy becomes a 'no hire, let's fire' story. This jeopardises the 'maximising employment' goal of the dual mandate, which could in turn prompt a weaker economy and risk the central bank undershooting its 2% inflation target over the medium to longer term."

A policy announcement from the Bank of Canada is also due. Rabobank reckons the Bank's cutting cycle is winding down, and sees a 25 basis points cut to 2.25% on Wednesday.

"Our view for the upcoming cut is shared by 20 out of 27 analysts surveyed by Bloomberg, and the OIS curve suggests markets are pricing in around 88% of the cut," it said.

On the corporate front in the US, quarterly earnings are due from Microsoft, Meta and Alphabet.

Derren Nathan, head of equity research at Hargreaves Lansdown, noted: "Together, their shares represent around $9 trillion of global stock market value."

In the UK, clothing and homeware retailer Next and specialty chemicals company Elementis are scheduled to update on Q3 trading, with a quarterly production report due from Glencore and quarterly results from Aston Martin.

In Europe, Airbus, Banco Santander, UBS and Deutsche Bank will all report.

Aarin Chiekrie, equity analyst at Hargreaves Lansdown, pointed out that Airbus delivered a solid first half in 2025, with revenue rising 3% to €29.6bn despite commercial aircraft deliveries falling from 323 to 306 planes.

"Amid ongoing supply chain constraints, particularly among engines, investors will be watching next week's third-quarter results like hawks," he said.

"Airbus had delivered a total of 507 aircraft by the end of September, keeping annual delivery targets of around 820 planes just within reach for now. The group has a history of ramping up production in the final quarter, but with a record-breaking uplift needed to meet its annual target, management commentary on the outlook will be key.

"For the third quarter, consensus expects double-digit revenue and operating profit growth to €17.4 billion and €1.7 billion respectively, as the production ramp up continues. Management's holding firm on full-year operating profit guidance of around €7.0 billion, signalling confidence in strong second-half execution."

Wednesday October 29

INTERIM DIVIDEND PAYMENT DATE

Panther Securities

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Crude Oil Inventories (US) (21:00)

MBA Mortgage Applications (US) (17:30)

Pending Homes Sales (US) (20:30)

Q3

Aston Martin Lagonda Global Holdings, Banco Santander S.A., GSK, Smurfit Westrock (DI)

SPECIAL DIVIDEND PAYMENT DATE

Panther Securities

AGMS

Hargreaves Services, Springfield Properties

TRADING ANNOUNCEMENTS

Next, Wetherspoon (J.D.)

UK ECONOMIC ANNOUNCEMENTS

Consumer Credit (16:00)

M4 Money Supply (16:00)

Mortgage Approvals (16:00)