Fed Holds Rates Steady as Inflation Remains Elevated; Memory Stocks Lead Market Rally

The Federal Reserve concluded its two-day October meeting by keeping the target range for the federal funds rate at 3.75% to 4.0%. While the policy statement noted that inflation remains elevated, Warsh indicated the Fed needs additional data before considering further action. Two members of the Committee dissented, advocating for an additional rate hike. Warsh also signaled a future reduction in the number of rate-setting meetings.

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Following the Fed announcement, memory and storage stocks posted notable gains. SK Hynix reported a surge in quarterly revenue and operating profit, coupled with expanded capital return plans, prompting its U.S.–listed shares to rise more than 12.5%. U.S. rival Micron Technology added nearly 6% to its price, extending a four-day winning streak and remaining up roughly 240% year-to-date despite being about 19% below its June record high. Management at both companies forecast that demand for memory will continue to outpace supply, fueling investor optimism.

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The same trading session featured earnings reports from a range of firms, including Ford, T-Mobile, Carvana, Honeywell Aerospace, MGM Resorts, ServiceNow, eBay, Chipotle, and Fortinet. Additionally, Apple unveiled its first touchscreen MacBook Pro, marking a strategic shift under CEO John Ternus and pricing the new models at $2,899, higher than the non-touchscreen counterpart.

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Investors look ahead to the release of the September Personal Consumption Expenditures (PCE) price index and the first estimate of third-quarter Gross Domestic Product (GDP). These indicators will provide further insight into inflation trends and could influence the market’s expectations for future Fed actions.

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