The Fed met Tuesday and Wednesday. The stock market didn't wait. Stocks rose Monday and again Tuesday. The S&P 500 closed Tuesday at 7,722.60, up 0.6%, about 1.23% under its Oct. 6 record. Chip stocks led. Yields rose. The dollar jumped. Boeing had its worst day since 2020. The rate decision came after our papers went to press, so you won't find it here.
Monday's gain had a few causes. Brazil's election shock sent its currency down more than 10% at one point, and its main stock index closed down 14%. Money ran to the dollar. Meta (META) said it would sell up to $95 billion of new stock, and its shares slipped 1.9% to $630.56. Chip stocks rallied ahead of this week's earnings from Microsoft (MSFT), Alphabet (GOOGL) and Amazon (AMZN). The S&P 500 rose 0.70% to 7,676.77, in Rob Curran's wrap for the Journal. Oil slipped 1.5% to $101.76 on talk of U.S.-Iran diplomacy.
Tuesday added a second gain. The S&P 500 rose 0.6%, the Nasdaq 1.2% and the Dow a bare 16 points. The Philadelphia semiconductor index climbed 3.60%. The VIX, Wall Street's fear gauge, eased to 17.52. Gold rose 0.9% to $4,058.80 an ounce. Oil fell a second day, down 1.8% to $99.90. The data helped. Durable-goods orders rose 1.8% in September. New-home sales slipped 0.6%. Consumer confidence improved. UPS jumped nearly 6% on a strong 2026 forecast. Boeing (BA) lost 11% after reporting one more quarterly loss.
The bond market set the table
The bond market got ready for the Fed its own way. The 2-year Treasury yield rose to 4.735%. The 10-year rose to 4.992%, a hair under 5%. The 30-year reached 5.304%. The dollar jumped, because traders expected the Fed to sound tough. A hold was the consensus. But the last few inflation readings ran hot, so nobody ruled out a hike. Standard Chartered's strategists put the odds of a surprise hike at roughly 1-in-4. Their note said hiking odds "took a leg down when tech-sector credit seemed to be under pressure," and tech had since rebounded.
One more thread from Monday. Elon Musk compared heavily indebted cloud renters like CoreWeave (CRWV) to "guppy" fish, the small ones that get eaten. CoreWeave still closed up 1.8%, at $55.19. The month has cost it 35%. One brokerage put the four biggest hyperscalers, the giant cloud companies, at about 75% of planned AI spending. Morgan Stanley's strategists noted their average credit ratings near AA and average market values above $3 trillion. The giants can borrow. The small fish may not.
Our read
This is investments and risk (IN04), with a fixed income (IN02) footnote. Two up days in front of a Fed meeting tell you how much the market had already decided. Don't trade the decision. By the time you read it, prices have moved. What you can act on is the rate itself. The 10-year sits at 4.992%, and a 13-week Treasury bill paid 4.050% at Monday's auction. Your cash should earn something close to that. In the model books, short Treasury bills (SGOV) sit in 49 books and gold (IAU) in 46. Microsoft is held in 29 books, Alphabet in 28, Amazon in 19 and Boeing in 7, all at weight. CoreWeave is a hold in one satellite sleeve at 16%. Nothing added.
The one thing in your plan this touches is the cash you'll need in the next two years. The check this week is to look up what that cash earns. If it's under 4%, a Treasury bill fund or a money-market fund closes most of the gap. It's a one-line check, and it's on every review we do. The Fed can surprise you. Your cash shouldn't. You don't buy the umbrella once it's already raining.