Global market follows the "Xi-Trump meeting": AI giants' earnings reports boost tech stocks, Bitcoin looks at $150,000

Despite Fed Chairman Powell's cautious stance on a rate cut in December, investors chose to ignore this “hawkish” signal and shifted their focus to the high-level meeting between U.S. President Donald Trump and Chinese President Xi Jinping, with the market generally expecting a thaw in trade relations. S&P 500 futures and Asian stock markets responded with a rise, particularly boosted by the technology stocks following Nvidia's market capitalization surpassing $5 trillion and Alphabet's strong earnings report, indicating that AI momentum will be a key force driving the next round of stock market gains.

Cautious Fed and Market Optimism

The Fed announced a 25 basis point rate cut on Wednesday (October 29), lowering the benchmark rate to 3.75%–4% to support a slowing labor market. However, Fed Chairman Powell's post-meeting remarks were far less “dovish” than the market had expected, as he warned that a rate cut in December is “far” from certain, causing a pullback in the market's initial easing expectations.

• Policy Divergence: The recent FOMC meeting passed a rate cut with a 10-2 voting result, where Governor Stephen Miran again voted against, advocating for a 50 basis point cut, while Kansas City Fed President Jeff Schmid opposed any rate cut. This divergence of opinions indicates increased uncertainty in the financial markets.
• Balance sheet changes: The Fed also announced that it will halt its quantitative tightening (QT) on December 1, ceasing to reduce the size of its balance sheet (which has fallen below $6.6 trillion, the lowest point since 2020), indicating that concerns about the liquidity conditions in the monetary market are increasing.
• Cryptocurrency market volatility: 15 minutes after Powell's speech, the cryptocurrency market saw $300 million in liquidations, but Bitcoin subsequently rebounded to above $112,000.

Despite the Fed sending cautious signals, investors are still digesting the impact of interest rate cuts and halting QT, turning their attention to more certain positive international trade news.

“Xi-Trump Meeting” and Expectations for Easing Trade War

Trump and Xi Jinping's meeting in South Korea is seen as key to easing the world's largest trade dispute.

• Trade optimistic signal: Trump stated that the United States and China “may” sign a trade agreement on Thursday. China has purchased two batches of American soybeans, marking the first purchase of this quarter, indicating that trade flows are expected to recover.
• Agreement details: Preliminary signs indicate that the two sides may reach an agreement to cancel or reduce some tariffs, fees, and export restrictions that have been threatened or implemented in recent months, including reducing U.S. tariffs related to fentanyl, approving the sale of TikTok's U.S. operations, and stopping China's comprehensive licensing plan for rare earth commodities.

Saxo Markets Chief Investment Strategist Charu Chanana pointed out: “Investors are ignoring the cautious Fed and betting on the easing of the 'Xi-Trump meeting.'”

AI Frenzy and Strong Support for Tech Stocks

In addition to macro policies and trade progress, the theme of artificial intelligence (AI) has brought strong tailwinds to tech stocks.

• Market capitalization breakthrough: Earlier in the market trading day, Nvidia Corp. reached a market capitalization of $5 trillion for the first time.
• Big Tech Spending: Alphabet Inc., Meta Platforms Inc., and Microsoft Corp. had a combined capital expenditure of $78 billion in the last quarter, a year-on-year increase of 89%, demonstrating a huge investment in AI infrastructure.
• Earnings reports divergence: Despite the mixed performance of tech giants' earnings reports (such as Meta down 7.4%, Microsoft down nearly 4%, but Alphabet up 6.7%), the overall AI momentum remains strong.
• IPO Expectations: OpenAI is preparing to go public as early as next year, with a valuation potentially reaching $1 trillion, further fueling market excitement in the AI sector.

Invesco's global market strategist Tomo Kinoshita stated that despite the Fed's communication being more “hawkish” than expected, Nvidia's market capitalization breakthrough and Alphabet's positive earnings report provided strong support for Asian tech-related stocks.

Bitcoin: Short-term under pressure, long-term still looking at 150,000 USD

Bitcoin experienced a brief fluctuation after the Fed statement but remained above $112,000 overall.

• Long-term bullish: Strategy Chairman Michael Saylor reiterated that Bitcoin will reach $150,000 by the end of the year and predicted it could reach $1 million in 4 to 8 years.
• Whale Accumulation: VALR CEO Farzam Ehsani pointed out that whale wallets holding 10,000–100,000 BTC have accumulated over 45,000 bitcoins since the crash in October, indicating that the current recovery is not just a brief rebound but has structural support driven by spot absorption.
• Technical pullback risk: Technical analysts point out that Bitcoin's historical trend often experiences a 6%-8% drop after the FOMC meeting, before reaching new highs. The current price is facing pressure from the CME futures gap (between $111,000 and $113,000), and it is more likely to first pull back to $111,000 to complete the gap filling, and may even extend towards deeper support levels between $108,000 and $110,000.

Conclusion

The market's cautious attitude towards the Fed shows a “selective listening,” placing more hope on the easing of trade conflicts and the explosive growth of AI technology. For the cryptocurrency market, despite the short-term technical pullback pressure, the continuous accumulation by whales and the expectations of long-term macroeconomic easing still provide a framework for Bitcoin to anchor Michael Saylor's year-end target of $150,000. Investors should closely monitor the final outcomes of the “Xi-Trump meeting” and the sustainability of capital expenditures in the AI sector, which will be the two macro forces determining the market's trend by the end of the year.