US Stock Indexes Hit Record Highs; Fed Anticipated to Ease Funding Pressures
Key Takeaways
- Nasdaq, Dow Jones, and S&P 500 hit all-time highs on strong earnings, Fed anticipation.
- JPMorgan expects the Fed to ease funding pressures after balance-sheet unwinding this month.
- Kaplan advocates for a Fed interest rate cut this month to reach the 2% inflation target.
- Goldman Sachs reiterates S&P 500 target of 6,800, projects 7,200 driven by earnings.
- Deloitte: US tariffs may increase oil and gas operating costs by up to 40% in 2026.
Top Stories
US stock indexes reach record highs amid earnings, Fed anticipation.
On October 28, 2025, major U.S. stock indexes, including Nasdaq, Dow Jones, and S&P 500, achieved all-time highs. This surge was fueled by strong corporate earnings and anticipation of a Federal Reserve interest rate cut.
JPMorgan: Fed to ease funding market pressures after balance-sheet unwinding.
On October 28, 2025, JPMorgan Chase & Co. strategists anticipate that the Federal Reserve will take additional measures to ease pressures in funding markets. The Fed is expected to stop shrinking its $6.6 trillion portfolio this month.
Kaplan: Fed nearing neutral rate, advocates for interest rate cut.
On October 28, 2025, Robert Kaplan stated that the Federal Reserve is nearing its neutral interest rate, estimated between 3.50% and 3.75%. He advocated for an interest rate cut this month to reach the 2% inflation target.
Goldman Sachs reiterates S&P 500 target of 6,800, projects 7,200.
On October 28, 2025, David Kostin of Goldman Sachs reiterated his year-end S&P 500 target of 6,800 and projected 7,200 for a year from now. This is driven by strong corporate earnings growth and anticipated Federal Reserve rate cuts.
Tariffs to increase oil and gas operating costs by up to 40%.
A Deloitte report on October 29, 2025, forecasts that U.S. tariffs on imported materials will increase operating costs by 4% to 40% for the oil and gas industry in 2026. This may delay over $50 billion in investment decisions.
Financial Analysis
Swap spread trade faces critical juncture amid Fed portfolio update.
On October 29, 2025, the swap spread trade widener faces a critical juncture due to the Federal Reserve's expected update to its $6.6 trillion securities portfolio. The trade's future hinges on whether the Fed halts its balance sheet reduction.
Market Insights
Italy: Business and consumer confidence improves in October 2025.
On October 28, 2025, Istat reported improved confidence among Italian businesses and consumers. The consumer confidence index rose to 97.6, and the composite business confidence indicator increased to 94.3.
UK 10-year gilt yield drops below 4.4% on rate cut expectations.
On October 28, 2025, the UK 10-year gilt yield fell below 4.4% due to increased market expectations of Bank of England rate cuts. The Office for Budget Responsibility is expected to downgrade UK productivity growth.
ECB survey: Inflation expectations down slightly, spending up.
In September 2025, the ECB's Consumer Expectations Survey revealed that inflation expectations for the next 12 months decreased slightly to 2.7%. Spending growth expectations rose to 3.5%.
Policy Watch
ADP: US job market shows 'tepid recovery' amid government shutdown.
On October 28, 2025, ADP reported a 'tepid recovery' in the US job market, with an average weekly increase in employment of 14,250. The Federal Reserve is expected to cut interest rates by another 0.25%.