Stocks closed mostly lower yesterday, reversing earlier gains after the Fed cut interest rates by 25 basis points as expected.

Fed Chair Jerome Powell's comment that another interest rate cut in December "is not a foregone conclusion," appeared to be the one that took stocks off their highs. He also hinted that the lack of data visibility from some key economic reports due to the government shutdown, could cause the Fed to wait and see. He didn't say it necessarily would. But suggested it's possible it could.

In the meantime, the Fed has relied on private estimates from non-governmental firms to fill in the data gaps.

Nonetheless, the general belief is that there will be another rate cut in December, as the Fed had forecast following their September meeting.

And that belief seems properly rooted. Mr. Powell, regarding labor, noted that "job gains have slowed." And he cited the recent rate cut as "cushioning a softening labor market."

While he noted that "the unemployment rate is very low," he also said that "job creation is very low," and "the job finding rate for people who are unemployed is very low." Given that, it sounds like another cut is still likely. But the Fed insists they will remain data dependent.

Additionally, the Fed said they would conclude their balance sheet reduction (Quantitative Tightening or QT) on December 1^st.

The next FOMC meeting is in 6 weeks on December 9-10.

Earnings season continued yesterday with 3 Magnificent 7 stocks reporting.

After the close, Microsoft reported a positive EPS surprise of 13.2%, and a positive sales surprise of 3.62%. That translated to a quarterly EPS growth rate of 25.2% vs. this time last year, and a sales growth of 18.4%. They said their investment in OpenAI weighed on net income by $3.1 billion for the quarter or 41 cents per share. They were off -0.10% in the regular session before earnings, and off -1.80% in after-hours trade following earnings.

After the bell we also heard from Alphabet, which posted a positive EPS surprise of 27.0%, and a positive sales surprise of 2.95%. That equated to a quarterly EPS growth rate of 35.4%, and a sales growth of 17.3%. They raised their CapEx estimate for all of 2025 by $7 billion. They were up 2.65% in the regular session, and up 6.60% in after-hours trade.

And Meta reported after the close and posted a positive EPS surprise of 9.68%, and a positive sales surprise of 3.63%, for a quarterly EPS growth rate of 20.2%, and a sales growth of 26.2%. But they took a one-time tax charge of nearly $16 billion, and raised their total expense estimate for the year by $2 billion. They were up 0.03% before earnings, but were trading lower by more than -8% afterwards.

Today we'll hear from 2 more Mag 7 stocks: Apple and Amazon. And another 365 other companies on deck to report.

Everyone will also be waiting to hear how the meeting went between President Trump and President Xi of China. They are scheduled to meet in South Korea today. Delegations from both countries are in town for the APEC Summit on Friday and Saturday. But it's the face-to-face talks between the heads of the two largest economies that everyone will be watching. The hope is that an agreement or an announcement will be made that serves to ease trade tensions between the two countries.

Should be another busy day.

See you tomorrow,