Big Tech’s Week
Chart of the Week:
Fed Delivers Hawkish 25 bps Cut, to End QT in December
As expected, the Fed cut rates by 25 bps but indicated no commitment to another cut in December, citing the current 3.75%–4% rate range as near the upper bound of neutral. The Fed will halt quantitative tightening (QT) on December 1 to ease liquidity tightness, meaning the balance sheet size will remain unchanged. According to WSJ, proceeds from maturing MBS will be redirected to short-term Treasuries.
Market Recap 1:
Solid Tech Earnings Offset Drag from Hawkish Fed Cut
Multiple risk events drove market volatility this week, including Trump’s visits to key Asian nations, the Fed’s hawkish rate cut, and earnings releases from major tech firms. Despite swings in index-heavyweights’ results, all three major U.S. indices posted solid weekly gains.
Market Recap 2:
Hawkish Cut Steepens Yield Curve; Long Bonds Volatile, Higher Yields Weigh on Gold
The Fed’s hawkish cut narrowed expectations for further easing, pushing the U.S. Treasury curve higher across maturities and weighing on bond performance. Investment-grade debt declined broadly, with long-duration bonds underperforming due to rate sensitivity.
What’s Trending:
Trump Visits Key Asian Nations to Rebuild Post–Trade War Ties
Last week, Trump toured several Asian countries, attending the ASEAN Summit and meeting Japanese Prime Minister Sanae Takaichi, South Korean President Lee Jae-myung, and Chinese President Xi Jinping. The trip, his first to Asia since implementing reciprocal tariffs, aimed to rebuild trade relationships, though prior trade-war plays continued to correct.
In Focus 1:
Tech Giants’ Earnings Highlight Robust AI Demand; Growth Strong but Expectations High
This week, alongside Nvidia’s GTC, the four AI giants—Meta, Google, Amazon, and Microsoft—released earnings, with investors focused on cloud growth and capex trends.
In Focus 2:
Trade Tensions Ease; Asia’s Tech Hardware Supply Chain Remains Indispensable
Overall, the four AI giants delivered solid revenue and profitability, with cloud services growing 20–40% YoY, showing strength beyond their core businesses and supporting sustained AI hardware demand.
