Published by Global Banking & Finance Review®
Posted on October 28, 2025
4 min readLast updated: January 21, 2026
Add as preferred source on GoogleStocks hit record highs driven by tech gains and easing trade tensions, as investors await the Federal Reserve's rate decision.
By Chuck Mikolajczak
NEW YORK (Reuters) -Global shares ascended to an intraday record on Tuesday, buoyed by signs of cooling trade tensions between the U.S. and China and by gains in technology shares, while investors awaited a Federal Reserve policy decision and digested corporate earnings.
The U.S. Federal Reserve on Wednesday will kick off a string of policy announcements this week by global central banks, including in Japan, Canada and Europe.
The Fed is widely expected to cut interest rates at the meeting, with markets pricing in a 99.9% chance for a rate cut of 25 basis points, according to CME's FedWatch Tool.
Expectations for a lower path of interest rates from the central bank, along with recent signs of easing trade tensions between the U.S. and China, have helped to boost the markets' risk appetite, sending stocks higher and keeping the 10-year U.S. Treasury yield moored near multi-month lows.
In addition, the ongoing U.S. government shutdown has led to a shortage of economic data for investors to parse.
CONTINUED RALLY SEEN IN RISKY ASSETS
With the lack of government data, investors have looked to other sources to gauge the strength of the economy. On Tuesday, the ADP National Employment Report's inaugural weekly preliminary estimate showed U.S. private payrolls increased by an average of 14,250 jobs in the four weeks ending October 11.
"Volatility has been extraordinarily low and in some respects, surprising, given all of the uncertainties ... but it seems to be very, very stable, and you're seeing the sort of continued rally in risky assets," said Subadra Rajappa, head of U.S. rates strategy at Societe Generale in New York.
"So you have a combination, especially for the Fed meeting, of lower yields, easier financial conditions, inflation coming off, the job market remaining somewhat stable as well, so it's been a tough read on the economy."
The European Central Bank and Bank of Japan are largely expected to keep rates unchanged at their policy meetings.
DOW LEADS GAINS AMONG MAJOR INDEXES
On Wall Street, U.S. stocks closed at another record, boosted in part by a 2% advance in Microsoft after it reached a deal that allows OpenAI to restructure into a public benefit corporation while giving the megacap company a 27% stake in the ChatGPT maker.
Also providing a boost was a 5% jump in Nvidia after CEO Jensen Huang said the artificial-intelligence chip leader will build seven new supercomputers for the U.S. Department of Energy, and the company has $500 billion in bookings for its AI chips.
The Dow Jones Industrial Average rose 161.78 points, or 0.34%, to 47,706.37, the S&P 500 rose 15.73 points, or 0.23%, to 6,890.89 and the Nasdaq Composite rose 190.04 points, or 0.80%, to 23,827.49.
"Momentum and earnings are pushing the market higher," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York, adding that there is also "enthusiasm about Trump's Asian trip."
Equities have rallied of late as U.S. President Donald Trump and his Chinese counterpart Xi Jinping are due to meet on Thursday to decide on a framework that could pause tougher U.S. tariffs and China's rare-earth export curbs, easing market worries about an escalating trade war.
Earnings are expected this week from "Magnificent Seven" heavyweights Microsoft, Alphabet, Apple, Amazon and Meta Platforms. Investors will closely eye the results to see if they justify lofty valuations.
MORE THAN FOUR IN FIVE S&P COMPANIES BEAT EXPECTATIONS
Of the 180 S&P 500 companies that have reported earnings through Tuesday morning, 86.7% have topped analyst expectations, according to LSEG data.
MSCI's gauge of stocks across the globe advanced 21.18 points, or 0.12%, to 1,013.68 after hitting a record 1,015.73 while the pan-European STOXX 600 index closed down 0.22%.
The yield on benchmark U.S. 10-year notes fell 2.1 basis points to 3.976%.
The dollar index, which measures the greenback against a basket of currencies, fell 0.07% to 98.70, with the euro up 0.11% at $1.1656.
Against the Japanese yen, the dollar weakened 0.52% to 152.07 after comments by a Japanese minister and U.S. Treasury Secretary Scott Bessent eased some concerns about more expansive fiscal and monetary policy in that country.
Sterling weakened 0.45% to $1.3275.
U.S. crude settled down 1.89% to $60.15 a barrel, and Brent fell to settle at $64.40 per barrel, down 1.86%, as investors assessed the effect of U.S. sanctions on Russia's two biggest oil companies along with a potential OPEC+ plan to raise output.
(Reporting by Chuck Mikolajczak; Additional reporting Johann M Cherian and Twesha Dikshit in Bengaluru, Caroline Valetkevitch in New York, Samuel Indyk in London and Wayne Cole in Sydney; Editing by Joe Bavier, Rod Nickel and Edmund Klamann)
The Federal Reserve, often referred to as the Fed, is the central banking system of the United States, responsible for regulating the nation's monetary policy and overseeing the banking system.
Interest rates are the cost of borrowing money, expressed as a percentage of the amount borrowed. They can influence economic activity by affecting consumer spending and business investment.
Economic growth is the increase in the production of goods and services in an economy over time, usually measured by the rise in Gross Domestic Product (GDP).
A stock market is a platform where shares of publicly traded companies are bought and sold. It serves as a barometer for the economy and provides companies with access to capital.
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