After a week dominated by central bank moves, tech earnings, and geopolitical diplomacy, investors enter November with markets riding high but caution growing beneath the surface. With the Federal Reserve’s latest rate cut and a Trump-Xi trade breakthrough in the rearview mirror, attention now shifts to a crucial week for earnings, particularly from companies fueling the AI and energy boom — and to a U.S. economy flying partly blind due to the government shutdown.

The Nasdaq closed last week up 2.5%, buoyed by strong results from Amazon (AMZN), while the S&P 500 and Dow Jones Industrial Average added 1% and 0.9%, respectively. But behind the optimism, investors face uncertainty on multiple fronts: a divided Fed, missing labor data, and the question of whether the market’s momentum can outlast policy turbulence.

Fed Fallout: Powell’s Pushback Rattles Markets

The Federal Reserve’s quarter-point rate cut last week — its second this year — was widely expected. What surprised markets was Chair Jerome Powell’s tone, which many interpreted as a warning that further easing is far from guaranteed.

“Another cut in December is not a foregone conclusion — far from it,” Powell said, in comments that sparked volatility across bond and currency markets. Analysts at Bank of America called the press conference “the real fireworks,” while Capital.com’s Daniela Hathorn said Powell “poured cold water on those expecting a dovish Fed pivot.”

The uncertainty is compounded by a near-total lack of government data. The U.S. government shutdown, now entering its second month, has delayed critical reports, including the monthly jobs numbers for a second consecutive cycle. As a result, Wednesday’s ADP private payrolls release will serve as the week’s main window into the labor market.

Meanwhile, deep divisions within the Federal Open Market Committee (FOMC) have come to the surface. Fed Governor Stephen Miran pushed for a more aggressive 50-basis-point cut, while Kansas City Fed President Jeff Schmid opposed any cut at all — and was later joined by several colleagues.

As of Friday, markets priced in only a 63% probability of another quarter-point cut in December, down from 95% a week earlier. “Powell has less control over the committee than before,” analysts at BNP Paribas noted, calling the policy path “rowdy and disorderly.”

Still, November’s seasonal tailwinds may offer a cushion. “Buy Halloween or Christmas Eve — it tends to pay for a New Year’s Eve celebration,” BofA analysts quipped, highlighting that the month has historically delivered strong equity returns.

Earnings Bonanza: AI and Energy in Focus

With macro data in short supply, corporate earnings will drive sentiment. This week’s lineup features a cross-section of the market’s most watched names: Palantir (PLTR), AMD (AMD), Supermicro (SMCI), and Constellation Energy (CEG).

Investors will look for signs of whether the AI trade — which has propelled much of the market’s gains this year — can sustain its momentum into 2026. Palantir will be under scrutiny for growth in government contracts, while AMD’s results could test the depth of demand for AI accelerators beyond Nvidia’s dominance.

Energy players like Constellation are also in focus amid volatility in oil and natural gas markets, as the global supply-demand balance remains fragile following U.S. sanctions on Russian producers and weaker-than-expected demand growth from Asia.

Trade Truce or Temporary Relief? Trump-Xi Meeting Lifts Sentiment

The geopolitical backdrop improved last week after President Donald Trump and Chinese President Xi Jinping declared “We have a deal,” following high-stakes talks in Seoul. Trump described the meeting as “a 12 out of 10,” signaling optimism over a wide-ranging agreement covering rare earths, soybeans, fentanyl regulation, and port fees.

Markets cheered the news, but analysts remain skeptical. The previous Phase One deal in 2020 fell short of its goals, with China purchasing barely half of the promised $200 billion in U.S. goods and the U.S. retaining most tariffs in place.

This new agreement, while symbolically significant, faces the same test: implementation. “The optics are better than the substance right now,” one Asia-based trade strategist told SKN. “Investors will wait to see if shipments and tariff rollbacks follow before re-rating China exposure.”

The Week Ahead: Watching Without Seeing

With the jobs report delayed, investors will rely heavily on ISM manufacturing and services data, as well as University of Michigan’s consumer sentiment index on Friday, to gauge the economy’s pulse.

The broader picture remains one of cautious optimism. Stocks are entering November — historically one of the strongest months for equities — with momentum, but the absence of hard data, the Fed’s internal divisions, and mixed corporate signals could test that confidence.

As one strategist at Macquarie put it, “The market’s challenge right now isn’t what’s happening — it’s what we can’t see happening.”