US Equities Edge Higher Ahead of Fed FOMC October 2026 Meeting

US equities began the week firmer as attention moved to the US Fed’s FOMC meeting. The two-day meeting starts on October 27 and ends October 28, 2026. US stock futures rose early Tuesday, hinting at a pause in October. Still, several global brokerages expected more tightening later, with at least three hikes priced over 12 months.

Overnight gains were broad, led by tech after Anthropic’s initial public offering supported risk appetite. The move came despite worries about heavy borrowing for AI projects. Tesla jumped more than 5%, and Nvidia added 2%. Microsoft and Amazon also rose. Investors also tracked key US data releases and guidance from the Fed.

Wall Street closed higher, with the Nasdaq Composite leading the advance. The Dow Jones added 146.42 points, or 0.3%, to 52,361.58. The S&P 500 rose 53.09 points, or 0.70%, to 7,676.77. The Nasdaq Composite gained 214.04 points, or 0.82%, to 26,169.38.

The early Tuesday futures market also pointed upward ahead of the decision. Dow Jones futures traded up 102 points, or 0.2%, at 52,652. Nasdaq 100 futures increased 31 points to 29,468.25. S&P 500 futures inched up 8.75 points to 7,722.75. The figures reflected positioning before the October 27-28 window.

Index	Latest close	Change	Futures (early Tuesday)
Dow Jones	52,361.58	+146.42 (+0.3%)	52,652 (+102, +0.2%)
Nasdaq Composite	26,169.38	+214.04 (+0.82%)	Nasdaq 100: 29,468.25 (+31)
S&P 500	7,676.77	+53.09 (+0.70%)	7,722.75 (+8.75)

Markets broadly expected the Fed to keep rates unchanged in October. Investors watched the statement and guidance for signs of a year-end move. UBS said futures pricing suggested no change now, but a hike in December. Trading Economics flagged durable goods orders, consumer confidence, and new home sales as key releases.

The previous policy shift came in September 2026, when Fed chair Kevin Warsh raised rates. The federal funds range moved up 25 basis points to 3.75% to 4%. All 19 policymakers supported the increase. Warsh said, "The plain fact is that inflation is too high and has been for too long."

Warsh also addressed communication at an IMF meeting in Bangkok. Warsh said, "I don't prejudge meetings. I don't believe in saying now what I might do at the meetings that we have in the balance of this year." Inflation data stayed above target after that meeting. CPI rose to 3.7% in September 2026, while core inflation reached 2.6%.

US Fed FOMC meeting: yields, rate hikes, and UBS view

Bond markets also reflected inflation pressure and energy risks linked to the Iran conflict. The 10-year US Treasury yield hit 5.36% in early October. That was its highest intraday level since 2002. It later eased to around 5%. UBS said, "Strong US economic data and higher energy costs pushed Treasury yields to multi-decade highs and raised concerns about an extended tightening cycle from the Federal Reserve."

UBS expected 25 basis point hikes in December 2026 and March 2027. UBS also forecast S&P 500 earnings growth of 25% in 2026. For 2027, UBS projected 14% growth. UBS said, "We rate fixed income as Attractive and see opportunities to add portfolio income through medium- to long-duration high-quality bonds and medium-maturity credit from stronger investment grade issuers."

UBS did not see measured tightening ending the equity rally. The note linked higher starting yields with income and diversification options. UBS said, "Investors should maintain diversified equity exposure and use the rise in yields to add selectively to quality bonds, while remaining cautious on the longest maturities and lower-quality credit." UBS also favoured spreading risk across regions and sectors.

Attention also stayed on corporate results during the policy week. On Tuesday, traders watched earnings from Coca-Cola, Robinhood and Boeing. Later in the week, Microsoft, Alphabet and Amazon results were due. Alongside earnings, strong activity data in 2026 supported the view that the US economy could handle elevated rates for longer.

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