On a Thursday in early November, American markets exhaled — interpreting the Federal Reserve's steady hand and Jerome Powell's measured words as a quiet signal that the long season of rising interest rates had finally run its course. The Nasdaq, S&P 500, and Dow all climbed, carried by the human instinct to find resolution in ambiguity. Yet beneath the optimism, dissenting voices like JPMorgan's Jamie Dimon reminded investors that economic reality rarely bends so neatly to narrative — and that the story of inflation may not yet have reached its final chapter.
Stocks surge as investors bet Fed rate-hiking cycle nears end
The market chose the optimistic reading of Powell's silence.
Mark
So the market rallied because investors think the Fed is done raising rates. But how confident are we that Powell actually said that?
Mimi
He didn't say it in those words. He held rates steady and his comments were interpreted by the market as signaling no more hikes in December. The CME tool shows traders moved from 59% to 85% odds of a pause—that's a real shift in pricing.
Luke
But Dimon is saying the Fed might hike another 75 basis points. That's a material disagreement. How do we know which reading of Powell is correct?
Mimi
We don't, not yet. Powell's language was cautious enough that both interpretations found support. The market chose the optimistic one.
Mark
What about the earnings? Are companies actually doing well, or is this just relief trading?
Mimi
Mixed. Starbucks and Shopify beat expectations, but earlier tech reports were uneven. Apple's results tonight will matter a lot—especially what they say about China.
Luke
And if Apple disappoints, does this rally reverse?
Mimi
Possibly. Right now the market is pricing in a soft landing and the end of rate hikes. That's fragile if either assumption breaks.
Mark
So we're really waiting to see if the economy can actually hold up without more rate increases.
Mimi
Exactly. The Fed's job was to cool inflation. If rates stay here and inflation stays sticky, that's a problem they haven't solved.
Luke
And Dimon's warning suggests at least some serious observers think the problem isn't solved yet.
Mimi
Right. The market is betting one way. The JPMorgan CEO is betting another. We'll find out who's right over the next few months.
The Pulse
- Markets surged Thursday as investors collectively decided Powell's language meant the Fed's rate-hiking cycle — more than a year of tightening — was effectively over.
- The shift was dramatic: odds of no further 2023 rate hikes leapt from 59% to 85% in a single afternoon, with tech stocks, long battered by rate fears, leading the rally.
- JPMorgan's Jamie Dimon cut against the grain, warning that sticky inflation could still force the Fed's hand by as much as 75 additional basis points — a reminder that relief and reality don't always align.
- Earnings season moved to center stage, with Shopify jumping 15% on AI-driven profitability and Starbucks beating estimates, even as the broader picture remained uneven.
- All eyes turned to Apple's after-hours report, with investors searching its numbers for clues about Chinese demand and whether the American consumer's resilience was holding or quietly fraying.
On a Thursday in early November, American markets exhaled — interpreting the Federal Reserve's steady hand and Jerome Powell's measured words as a quiet signal that the long season of rising interest rates had finally run its course. The Nasdaq, S&P 500, and Dow all climbed, carried by the human instinct to find resolution in ambiguity. Yet beneath the optimism, dissenting voices like JPMorgan's Jamie Dimon reminded investors that economic reality rarely bends so neatly to narrative — and that the story of inflation may not yet have reached its final chapter.
On Thursday, stock markets surged on a single powerful conviction: the Federal Reserve's rate-hiking campaign was finally over. The Nasdaq rose more than 1.1%, the S&P 500 gained roughly 1%, and the Dow climbed about 0.9% — extending strong gains from the day before, when the Fed held rates steady at their highest level in 22 years. What moved markets wasn't the decision itself, but the words that accompanied it. Investors read Chair Jerome Powell's remarks as a clear signal that December would bring no new increases, and that the cycle of tightening, which had stretched across more than a year, was drawing to a close.
The shift in expectations was swift and measurable. Before Powell spoke, traders priced in a 59% chance of no further hikes this year. Afterward, that figure jumped to 85%. For a market that had spent months bracing against uncertainty, the prospect of stability felt like genuine relief — particularly for the tech-heavy Nasdaq, which had been among the most sensitive to rate-hike fears.
Not everyone shared the optimism. JPMorgan CEO Jamie Dimon told Yahoo Finance he believed the Fed might still raise rates by as much as 75 basis points, pointing to inflation he described as stickier than officials had hoped. His caution served as a counterweight to the day's buoyant mood, suggesting the underlying economic picture remained more complicated than the rally implied.
As the Fed's next move seemed to settle in investors' minds, corporate earnings filled the remaining space. Shopify jumped 15% after reporting a return to profitability, crediting artificial intelligence. Starbucks beat estimates and rose in early trading. But the broader earnings season had been uneven, and Apple's after-hours report loomed large — investors hoping its numbers would clarify the state of iPhone demand in China and the durability of consumer spending. The 10-year Treasury yield fell to 4.62%, its lowest in over two weeks, as the market held two competing feelings at once: relief that the hiking era might be ending, and quiet uncertainty about what comes next.
On Thursday, stock markets surged on a simple but powerful bet: the Federal Reserve's campaign to raise interest rates was finally over. The Nasdaq climbed more than 1.1%, the S&P 500 gained roughly 1%, and the Dow Jones Industrial Average rose about 0.9%. All three major indices had already posted strong gains the day before, when the Fed announced it would hold rates steady at their highest level in 22 years. But it was Chair Jerome Powell's comments accompanying that decision that shifted the market's mood. Investors read his remarks as a signal that December would bring no new rate increases—and that the hiking cycle, which had lasted more than a year, was drawing to a close.
The shift in market expectations was stark and swift. Before the Fed's announcement, traders were pricing in a 59% probability of no additional hikes for the remainder of the year. After Powell spoke, that figure jumped to 85%, according to the CME FedWatch Tool. For investors who had endured months of uncertainty about how high rates might climb, the prospect of stability felt like relief. The tech-heavy Nasdaq, which had been particularly sensitive to rate-hike fears, led the charge higher.
Yet not everyone was convinced the Fed was truly finished. Jamie Dimon, the CEO of JPMorgan Chase, told Yahoo Finance that he believed the central bank might still have room to raise rates by as much as 75 basis points. His reasoning centered on inflation that remained stubbornly elevated—what he called "stickier" than officials might have hoped. "I suspect they may not be done," Dimon said, offering a counterpoint to the market's newfound optimism. His view suggested that even if Powell's language had softened, the underlying economic picture remained complicated.
With the Fed's next move apparently settled in investors' minds, attention shifted to the earnings reports that companies were releasing in real time. Thursday's trading was framed by a packed calendar of corporate results, with Apple's quarterly report scheduled to arrive after the market closed. Investors were particularly focused on what Apple's numbers would reveal about iPhone demand in China and the health of global consumer spending more broadly. Earlier earnings from major technology companies had painted a mixed picture, leaving questions about whether consumers were still willing to spend at previous levels.
Some companies delivered encouraging news. Starbucks beat revenue and earnings estimates, sending its shares higher in early trading. Shopify reported a return to profitability in the third quarter, crediting its adoption of artificial intelligence, and its stock jumped 15%. These wins suggested that at least some corners of the economy remained resilient. But the broader earnings season had not been uniformly strong, and investors were watching carefully for signs of weakness. The 10-year Treasury yield fell to 4.62%, its lowest point in more than two weeks, as traders reassessed the economic outlook and the path forward for monetary policy. The day's trading reflected a market caught between two competing narratives: relief that rate hikes might be ending, and lingering uncertainty about what that would mean for corporate profits and consumer behavior in the months ahead.
Notable Quotes
I suspect they may not be done.— Jamie Dimon, CEO of JPMorgan Chase, on whether the Federal Reserve's rate-hiking cycle is complete
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