Rate-Cut Expectations Rise as U.S. Stocks Diverge

Market Overview

Weaker-than-expected ADP employment data on Wednesday suggested that the U.S. labor market is cooling, fueling expectations of a Federal Reserve rate cut. Combined with optimism that the government shutdown may soon end, the Dow Jones Industrial Average surged over 1%. However, the Nasdaq closed lower, weighed down by weakness in major tech names.

Among individual stocks, FedEx — often viewed as a barometer of economic activity — issued upbeat guidance, lifting traditional economy sectors. Apple rose 2.16%, reclaiming its $4 trillion market capitalization. Meanwhile, Nvidia fell nearly 3% after reports that SoftBank fully exited its position in Q3, and CoreWeave tumbled almost 16% following its earnings report.

Treasury yields declined on the softer employment data, with the 10-year yield falling back below 4.1%. The U.S. dollar index also retreated from its intraday highs. In crypto markets, Bitcoin and Ethereum both dropped more than 3%, ending their recent rally. Safe-haven assets strengthened, with gold logging its third consecutive gain and silver climbing nearly 1.5%, reclaiming the $51 level.

Hot Topics Ahead

● Trump Details “Tariff Rebate” Plan

The Committee for a Responsible Federal Budget (CRFB) estimated that former President Trumps proposed “tariff rebate” program could cost as much as $600 billion, far exceeding the roughly $300 billion in projected tariff revenues. Economists have criticized the plan as “fiscally irresponsible,” warning it could trigger inflation similar to that seen during the pandemic stimulus period. Treasury Secretary Bessent hinted that the “$2,000 rebate” could instead be implemented through tax reductions.

● Tech Giants Profits Inflated by Understated Depreciation

Michael Burry — known as “The Big Short” investor — warned that the actual lifespan of AI chips and related hardware is only 2–3 years, yet some companies are depreciating them over six years. He predicts that between 2026 and 2028, major tech firms could overstate profits by $176 billion due to under-depreciation. Bank of America also cautioned in September that a surge in depreciation expenses could heavily pressure tech sector profitability in the coming years.

Key Events to Watch

18:00 (GMT+8), the OPEC Monthly Oil Market Report will be released.

22:20 (GMT+8), John Williams, President of the New York Fed and a permanent FOMC voter, is scheduled to speak.

23:20 (GMT+8), Christopher Waller, Federal Reserve Governor, will deliver remarks.