Tech Rally Continues, Treasurys Weaken Ahead of Fed Decision — Update

By Joe Stonor

Tech stocks extended this week's gains and Treasury yields crept up, as investors await a bumper day of macroeconomic news and big tech earnings.

The Federal Reserve's October policy decision is the major event of the day, even if the outcome looks set in stone: Markets are currently pricing a 90.6% chance of rates being held steady, according to LSEG. Chair Kevin Warsh's press conference will be watched for indicators on how the central bank views an economy that is still running hot even as Treasury yields have risen.

"We suspect Chair Warsh will not want to tie himself in knots by citing a tightening in financial conditions, having learnt from the unruly market response to his press conference in July," said ING's global head of markets Chris Turner in a note.

Ahead of the decision, 10-year Treasury yields rose back above 5% while 30-year yields gained around 0.5 basis point to trade close to 5.310%. Two-year Treasury yields nudged higher to trade around 4.750%.

In equity markets, artificial-intelligence stocks rallied across the globe. Strong results for chip maker SK Hynix helped calm investor fears that the AI spending boom was running out of steam. Shares in the South Korean group jumped 11%, helping the Kospi to close 6.6% higher. Japan's Nikkei 225 added 1.1%, while stock indexes gained in Hong Kong and Shanghai, too.

That positive sentiment boosted the Nasdaq, with futures for the index climbing 0.35%. Chip makers gained premarket, with SK Hynix peer Micron Technology jumping 4.1%. Futures for the S&P 500 rose 0.2%, while Dow Jones Industrial Average futures were flat. Earnings releases from big AI spenders Microsoft and Alphabet after the close will be scrutinized for signs that the companies' huge investments in the technology are turning into revenue.

"If hyperscalers continue to report steady numbers, that will tell markets that the investment they are making can still endure in a rising rate environment," said Mobeen Tahir, thematic strategist at asset manager WisdomTree. "That will give a lot of comfort to markets."

Oil prices rose as Houthi militants continued to target Saudi Arabia. Meanwhile, the U.S. has warned Gulf Arab countries to prepare for a possible short, intense military campaign after the U.S. midterm elections next week, The Wall Street Journal reported, raising the specter of renewed escalations and energy-market disruption in the region. Benchmark Brent crude oil contracts rose more than 1% to trade above $115 a barrel in early U.S. trade.

The U.S. dollar rose against a basket of global currencies as gold edged back toward $4,000 a troy ounce. The tech rally helped bitcoin to strengthen, with the cryptocurrency recovering after falling sharply Tuesday to trade around $80,700.

U.K. banking stocks rose after a tax on the sector announced by the U.K.'s finance chief was smaller than expected. Financial stocks rose across the continent after a suite of bank earnings, with the European Stoxx 600 index rising 0.1%.

In Israel, the shekel weakened and a gauge of the country's stocks fell 2.6% after parliamentary elections Tuesday failed to produce a clear result, putting the country on course for an uncertain period of political wrangling.

For the day ahead, the Fed decision will be firmly in focus. The Bank of Canada will also announce its policy decision before big tech earnings after the bell.

Write to Joe Stonor at josephmichael.stonor@wsj.com

(END) Dow Jones Newswires

October 28, 2026 10:12 ET (14:12 GMT)