[New York = E-Daily Seong Joowon Correspondent] On the 28th (local time), the New York stock market rose for the third consecutive trading day amid the U.S. Federal Reserve’s (Fed) expected decision to keep interest rates unchanged. Major indices rose slightly as the Fed upgraded its assessment of the U.S. economy but did not provide a clear signal regarding whether it would raise rates further in December. Meanwhile, Oracle and semiconductor stocks performed strongly as expectations for returns on artificial intelligence (AI) investments rebounded. After the market closed, after-hours stock prices moved in opposite directions as reactions to the earnings reports from Microsoft (MS) and Alphabet were mixed.

On the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 52,475.10, up 97.53 points (0.19%) from the previous session. The S&P 500 index rose 21.38 points (0.28%) to 7,743.98, while the tech-heavy Nasdaq Composite Index closed up 72.04 points (0.27%) at 26,549.85. All three major indices rose for the third consecutive trading day.

85% Chance of a December Rate Hike Despite Fed Hold… Market Remains Calm The Federal Reserve

kept its benchmark interest rate unchanged at 3.75–4.00% annually at today’s Federal Open Market Committee (FOMC) meeting. This marks a pause following the 0.25 percentage point rate hike in September—the first in about three years. The decision was approved by a vote of 10 in favor and 2 against.
In its statement, the Fed assessed that U.S. economic activity is expanding at a “strong pace.” This represents an upgrade from the “solid pace” described in the September statement. However, it noted that inflation remains elevated.
At a press conference, Fed Chair Kevin Warsh offered a positive assessment of the employment situation but emphasized that price stability remains the key priority. Regarding the possibility of an additional rate hike in December, he stated that he would not prejudge the outcome of the next meeting.
The market had fully anticipated this hold. Immediately before the meeting, the probability of a hold, as reflected in the CME FedWatch, was approximately 93%. According to Reuters, the probability of a 0.25 percentage point hike in December rose from 78.3% the previous day to about 85% on the day of the announcement.
Ryan Dietrich, chief market strategist at Carson Group, commented, “The Fed did not make an unexpected decision,” adding, “Since the hold was widely anticipated, it came as no major surprise.”
Jeff Schultz, chief investment strategist at Franklin Templeton Institute, said, “Today’s decision does not rule out the possibility of an additional 0.25 percentage point hike before the end of the year.” He went on to analyze that the key question for the market is the pace of tightening, noting that the Fed appears content to gradually reverse the rate cuts it implemented last year.
Luis Alvarado, a strategist at Wells Fargo Investment Institute, noted that while the Fed appears to believe it has the leeway to wait for the time being, “patience should not be confused with complacency.”

Oracle Jumps 11%… Semiconductor Stocks Rally on SK hynix’s Strong Earnings

In today’s stock market, the

earnings reports

and investment plans of AI-related companies drew as much attention as the Fed’s decision.
Oracle surged by about 11%. This was driven by the company’s announcement that it expects revenue of $225 billion (approximately 302 trillion won) for fiscal year 2030 and will limit additional funding to $20 billion for fiscal years 2027–2030. Investors, who had been concerned about the financing burden associated with massive data center investments, viewed this as a positive signal.
Semiconductor stocks also rose in tandem. SK hynix’s American Depositary Receipts (ADRs), traded in the U.S., surged 13.3% after SK hynix(000660)reported quarterly operating profit that increased more than sevenfold year-over-year. Micron rose 5.9%, and ARM rose about 4%. The Philadelphia Semiconductor Index also rose 1.8%, extending its winning streak to four consecutive trading days.
Vertiv, an AI data center infrastructure company, surged 16.5% after reporting quarterly earnings that exceeded market expectations and raising its full-year outlook.
Strategist Dietrich explained, “While what the Fed did today is important, the market is watching to see if AI spending continues to grow,” adding, “That is the market’s primary focus.”
However, the market’s outlook on AI investment is not entirely optimistic. Bill Noshi, Chief Investment Officer at U.S. Bank Asset Management, noted, “The short-term AI investment cycle is very healthy,” but pointed out that the key questions are whether massive investment can continue over the next few years and to what extent investing companies will generate profits. He emphasized the likelihood of a divide between winners and losers rather than all companies turning a profit.

Microsoft Rises in After-Hours Trading, Alphabet Plummets… Mixed Assessments of AI Investment Performance

Market assessments

of

AI

investment performance

were also mixed in the earnings reports from major tech companies released after the market closed.
Microsoft reported first-quarter fiscal 2027 revenue of $92.279 billion, a 19% increase from the same period last year. This exceeded market expectations of $90.69 billion. Adjusted earnings per share (EPS) also came in at $4.89, surpassing the forecast of $4.73.
In particular, revenue from Azure, its core cloud service, surged 48%, demonstrating the success of its AI investments. Following the earnings announcement, Microsoft’s stock price rose as much as 5% in after-hours trading before the gain narrowed to around 2–3%.
In contrast, Alphabet, Google’s parent company, reported revenue of $127.577 billion, a 25% increase, but fell slightly short of market expectations. Despite a 103% surge in Google Cloud revenue, the stock price is down more than 9% in after-hours trading due to disappointment over the overall results.
It is also noteworthy that both companies are significantly increasing their investments in AI infrastructure. Alphabet’s third-quarter capital expenditures totaled $51.355 billion, a 114% increase year-over-year, while its free cash flow posted a deficit of $9.065 billion. Microsoft also spent $45.2 billion on capital expenditures and finance leases combined, and its free cash flow decreased by 27%.
While expanded AI investment is driving cloud revenue growth, the extent to which these massive capital expenditures can be converted into stable cash generation has emerged as a key factor that will determine future corporate value.

Oil Prices in the $100 Range, Rising Long-Term Interest Rates… Inflationary Pressure Persists

In the interest rate and commodities markets, inflation concerns persisted. Fears of disruptions to crude oil supply intensified following reports that Iran-backed Houthi rebels in Yemen had attacked Saudi Arabian oil refining facilities.
U.S. West Texas Intermediate (WTI) crude oil rose 1.6% to $101.52 per barrel. With oil prices remaining above $100 following the war in the Middle East, inflationary pressures are mounting.
U.S. Treasury yields showed mixed results across different maturities. The 10-year Treasury yield rose 3 basis points (bp; 1 bp = 0.01 percentage point) to 5.03%, while the 30-year yield climbed 4 bp to 5.35%. In contrast, the 2-year yield—which is sensitive to monetary policy—fell 3 bp to 4.71%.
The market’s next focus is on the U.S. third-quarter gross domestic product (GDP) growth rate and the September Personal Consumption Expenditures (PCE) price index, both set to be released on the 29th. In particular, if the PCE inflation rate—the Fed’s preferred measure—comes in higher than expected, it could bolster expectations for an additional rate hike in December.
Corporate earnings are also a key factor. According to data from the London Stock Exchange Group (LSEG), 84% of the 200 S&P 500 companies that have reported earnings so far have exceeded market expectations. The forecast for third-quarter earnings growth for all companies has also risen from 30.6% to 31.8% since early this month. With strong corporate earnings supporting the stock market, the Fed’s further monetary tightening and assessments of the profitability of AI investments are expected to determine future market trends.