S&P futures declined on Thursday as investors processed a series of earnings reports from major technology companies. Losses were contained following the conclusion of a meeting between President Donald Trump and Chinese President Xi Jinping. Futures associated with the Dow Jones Industrial Average experienced a decline of 158 points, representing a decrease of 0.3%. S&P 500 futures declined by 0.1, mirroring the movement of Nasdaq-100 futures. Megacap tech giants Alphabet, Meta, and Microsoft each reported quarterly results after the market closed on Wednesday. Investors are assessing the rate of expenditure on AI and the returns that companies are realizing from this investment. Following the release of robust financial results, shares of Alphabet, Google’s parent company, surged approximately 9%. In contrast, shares of Meta and Microsoft experienced declines of roughly 9% and nearly 2%, respectively. The broader market was influenced by reactions to the results.

Meta reported its highest revenue growth since the first quarter of 2024; however, the social media company indicated that President Donald Trump’s One Big Beautiful Bill Act resulted in a one-time charge of $15.93 billion. Meta anticipates that the legislation will impact U.S. federal cash tax payments for the remainder of this year and in subsequent years. Microsoft’s shares experienced a decline following the announcement that its investment in OpenAI had led to a $3.1 billion reduction in earnings for the quarter. The disclosure raised concerns regarding the persistence of expenditures in the AI sector. Thursday’s losses were alleviated, as Trump consented to reduce fentanyl tariffs on China to 10%, while Beijing postponed the most recent restriction on rare earth exports by one year. “The rare earth issue has been resolved,” Trump stated.

U.S.-listed rare earth miners experienced a notable increase following the announcement, with USA Rare Earth appreciating by 5% and MP Materials rising by 3%. The reduction in U.S. tariffs has adjusted the overall levy on Chinese imports from 57% to 47%. As part of the agreement, Beijing will “work very hard to stop fentanyl” and purchase U.S.-grown soybeans along with other agricultural products. Wall Street experienced a day characterized by mixed outcomes. The Dow experienced a decline, concluding the day with a decrease of approximately 0.2%, equating to around 74 points, following a brief moment at a record high earlier in the session. The S&P 500 concluded the day with little change, whereas the Nasdaq registered an increase of approximately 0.6%. The recent developments followed remarks from Federal Reserve Chair Jerome Powell, indicating that the central bank might refrain from further interest rate cuts at its December meeting, a scenario that investors had anticipated. “A further reduction in the policy rate at the December meeting is not a foregone conclusion.” “Far from it,” he stated.

The Federal Reserve on Wednesday reduced its benchmark overnight borrowing rate by a quarter percentage point at the conclusion of its two-day policy meeting, establishing a range of 3.75% to 4%. “The interest rate cut was the easy part as markets were giving the Fed breathing room,” stated Chris Maxey. “Currently, there exists a suitable equilibrium between monetary policy and the labor/inflation landscape. Powell unsettled markets with remarks regarding the uncertainty surrounding a December rate cut, indicating the potential emergence of a narrative characterized by a sluggish response. Sam Stovall stated that the Fed “might be forced to cut more than they indicated wanting to” if tech earnings demonstrate that AI-related productivity is accelerating at a quicker rate than expected. October has historically exhibited the highest volatility of any month, he observed, suggesting that forthcoming price fluctuations could present traders with a compelling buying opportunity.