Investors brace for hawkish hold and use of technology

Hello, this is Leonie Kidd from today’s Morning Squawk.

Investors will be evaluating two major market trends today: the Fed’s decision and new earnings from tech companies.

The common thread is inflation, with policymakers pointing to an AI-driven demand boom that is driving up prices along with energy.

For now, futures prices are stable, and Fed officials are expected to keep interest rates stable as well.

Investors are likely to open cautiously today as they prepare for a series of big market moments this afternoon.

The U.S. Federal Reserve is scheduled to announce its decision at 2 p.m. ET, leaving policymakers almost certain to keep interest rates on hold.

Expert opinion: CNBC’s Steve Reisman will closely monitor how Chairman Kevin Warsh faces the dilemma of pitting “system change” monetary policy principles against the task of running the committee. Analysts’ take: “Despite his professed dislike of naive investors, Mr. Warsh, who is wary of market risks, should be able to display calm and steady demeanor,” Evercore ISI’s Krishna Guha said in a recent note. “But there are significant execution risks.” Featured Thoughts: Immediately after the press conference, CNBC’s “Closing Bell” will sit down with fixed income veteran Jeffrey Gundlach to get his immediate reaction.

The CNBC exclusive will also feature fiscal views from Treasury Secretary Scott Bessent, who will discuss the economy, midterm elections and more with CNBC’s Brian Sullivan. Watch the interview at 4pm ET.

Previously: When Secretary Bessent spoke to CNBC last month, he warned that the Trump administration has no intention of giving AI a “liability shield.”

This is a positive carryover from Asia, with South Korean indexes surging overnight following a series of solid numbers from market giant SK Hynix. Third-quarter operating profit soared more than expected, and the semiconductor maker returned $25 billion to shareholders.

Why it matters: This could be another tailwind for semiconductor stocks like Micron. SK Hynix has become a major influence on Korean indexes, providing an early indicator of future AI trading sentiment. Sector trends: Chip stocks led gains on Wall Street on Tuesday after Broadcom announced that a group of banks would provide a $63 billion loan to buy the company’s chips and networking solutions that will be leased to Anthropic.

The main earning action will take place after the bell today. alphabet and microsoft Both will be reported.

Context: After a spike in volatility, concerns about artificial intelligence debt have eased. However, further tests for AI debt are planned, and these important returns come alongside Oracle’s investor day later on Wednesday.

Ahead of that, a number of big releases were announced from Europe’s biggest banks. Here is the summary:

Swiss banking giant UBS saw pre-tax profits rise by nearly 30% in the quarter.

What the CEO says: Sergio Ermotti told CNBC’s “Squawk Box Europe” that the bank is seeing strong inflows across its business units.

deutsche bank reported record profits for the third consecutive quarter, while the German lender’s assets under management soared to $2.2 trillion.

A CFO’s take: Raja Akram spoke to CNBC’s Annette Weisbach in Frankfurt about staying competitive with U.S. peers.

Robinhood shares fell in late trading after the retail trading platform missed profit expectations as crypto weakness weighed on profits. The stock price is down about 40% from its high in October of last year.

What’s next: “Squawk on the Street” speaks with CEO Vlad Tenev at 10 a.m. ET.

Shares of Meta and Google-backed company Jio Platforms soared more than 20% on their first day of trading in India. This was the largest IPO in the country’s history, raising $3.2 billion.

Why it matters: Nomura gave Jio Platforms a Buy rating and set a target price of Rs 1,340, implying 19.7% upside to the IPO price. The brokerage said in a report that Jio’s capex cycle is almost over and the company’s free cash flow is expected to improve significantly.

Two important elections have created geopolitical uncertainty.

After the second round of voting in Brazil, Sen. Flavio Bolsonaro defected to the United States.

He was issued a visa to travel to the United States after he failed to comply with an order by Brazil’s Supreme Court to surrender his passport.

Why it matters: This will strain relations with President Lula after Trump said he believed the election may have been “rigged.”

Meanwhile, after Tuesday’s vote, there appears to be no clear winner in Israel’s election. Exit polls show that neither Prime Minister Benjamin Netanyahu nor his challenger Gadi Eisenkot have the numbers needed to form a coalition government.

Official results will be announced on November 4th.

President Trump jokes that $5,000 could buy him a “hamburger and a little dessert” at Mar-a-Lago

A week before the midterm elections, with voter concerns about affordability dominating, President Donald Trump joked that the $5,000 payments he promised American adults at Florida’s Mar-a-Lago club would only buy them “a hamburger and maybe a small dessert.”

President Trump has promised to provide $5,000 to every adult citizen if Republicans win both houses of Congress, specifying that the money must be spent within the United States.

“Go to Florida, go to any of our great places. You can come to Mar-a-Lago,” Trump said Tuesday at a rally in Texas. “The problem is, $5,000 can only buy you a hamburger and maybe a small dessert.”

—CNBC’s Steve Liesman, Jeff Cox, Jenny Lee, Davis Giangiulio, Hugh Leask, Anniek Bao and Tanaya Macheel contributed to this report.

John Meloy edited this version.