Pre-Market Pulse 2nd November – Stocks get relief rally as Fed keeps rates unchanged

Overnight – Stocks get relief rally as Fed keeps rates unchanged  

Equities ended higher overnight following a slump in Treasury yields after the Federal Reserve kept rates steady for second-straight meeting.

The Federal Reserve kept its rates steady on Wednesday for the second-straight meeting despite the threat of ongoing “strong” economic growth.

“Recent indicators suggest that economic activity expanded at a strong pace in the third quarter,” the Fed said in a statement. Short-term yields fell 12.5 basis points to 4.93%, which is the lowest level since September. Investors will also keep an eye on the country’s future refinancing plans, with yields close to historic highs, even after the Treasury forecasted a lower fourth-quarter borrowing need than previously flagged.

Leading into tomorrow’s key US payrolls numbers, ADP private sector payrolls came in at a lower than the expected 113,000 though still stronger than the September reading. In a sign that labor demand remains healthy, however, the September JOLTS job openings topped economists estimates.

Energy stocks were marginally higher intraday, underpinned by rising oil prices following official data from the Energy Information Administration showing weekly U.S. crude stockpiles rose less than expected last year. 

Earnings Results

Advanced Micro Devices (AMD) – rallied more than 9% as the chipmaker’s weaker-than-expected current-quarter guidance was cast aside after the company touted strong demand for its artificial intelligence chips. AMD also reported better-than-expected Q3 results. The company said it expects to sell $2 billion of graphics processing units used in the development of AI programs that some on Wall Street say should boost its data center business, removing the drag from other businesses including gaming.