The Dow Jones Industrial Average (DJIA) hovered near all-time highs on Monday, starting the new trading week above 46,800 before easing slightly as investor sentiment wavered. Despite the early dip, the broader market tone remains positive, supported by expectations of continued monetary easing from the Federal Reserve (Fed).
With the Fed widely expected to deliver another rate cut on October 29, equity markets remain well-supported. However, the ongoing U.S. government shutdown that now entering its second week has disrupted the release of key economic data, including the Nonfarm Payrolls (NFP) report. Without fresh data, investors are betting that the Fed will base its decisions on currently available information, which continues to favor further policy easing.
It’s a rate cut market, and everyone’s trading on it
The CME FedWatch Tool shows markets pricing in a 95% probability of a 25-basis-point rate cut at the Fed’s October 29 meeting, leaving little room for surprise. Traders are also assigning more than 80% odds to another rate reduction on December 10. Beyond that, expectations for a fourth cut stretch as far as April 2026, reflecting uncertainty about the long-term policy path.
This week’s economic calendar offers few major releases. Investors will focus on Wednesday’s Federal Open Market Committee (FOMC) Meeting Minutes for clues about policymakers’ internal discussions at the most recent decision. Fed Chair Jerome Powell is also set to make a virtual appearance Thursday, with a pre-recorded message to be released during the Community Bank Conference in Washington, D.C.
