U.S. Stocks Flat as Investors Await Fed Comments; Pepsi and Delta Earnings in Focus
U.S. stock markets were largely subdued on Thursday, with investors awaiting fresh remarks from Federal Reserve officials on the outlook for interest rates and monetary policy.
By 10:19 ET (14:19 GMT), the S&P 500 had slipped 0.2%, the Nasdaq Composite was down 0.2%, and the Dow Jones Industrial Average had fallen 0.3%.
Markets also digested the minutes from the Federal Reserve’s latest policy meeting, while enthusiasm over artificial intelligence stocks continued to support sentiment after fueling much of this year’s rally.
However, investors remained cautious as the U.S. government shutdown entered its second week, raising concerns that the standoff in Washington could delay the release of key economic data in the coming days.
Fed’s Williams Signals More Rate Cuts Possible in 2025
Speaking to the New York Times, New York Fed President John Williams said a cooling labor market could give policymakers room to lower borrowing costs again later this year.
“My view is that we will likely have lower rates this year, but it depends on how data evolve,” Williams said. He cautioned that while inflation remains above target, cutting too aggressively could risk a sharper slowdown in employment.
Other Fed officials are also scheduled to speak throughout the day, though analysts expect limited new insight given the lack of fresh data. Fed Chair Jerome Powell offered brief remarks at a conference but made no direct reference to interest rates.
FOMC Minutes Reveal Split Over Rate Path
The FOMC minutes from the September meeting, when the Fed cut rates by 25 basis points, showed division among policymakers over how quickly to ease further.
While most members favored additional rate reductions before year-end, others warned of persistent inflation risks.
Analysts at Capital Economics said the minutes confirmed the committee’s intent to bring rates closer to a “neutral” level, balancing employment risks with price stability goals. Market expectations for another 25-basis-point cut this month remained unchanged after the release.
Corporate Earnings: Pepsi and Delta Lead Market Attention
On the earnings front, PepsiCo (NASDAQ: PEP) reported third-quarter revenue and profit above forecasts, driven by strong demand for low-sugar drinks and energy beverages in the U.S.
CEO Ramon Laguarta said Pepsi aims to expand its product lineup to meet shifting consumer preferences and enhance cost efficiency through packaging innovation.
Activist investor Elliott Investment Management, which recently took a $4 billion stake in the company, has pushed for cost-cutting measures and the possible spin-off of non-core brands like Quaker Oats. Pepsi shares rose 0.4% in early trading.
Meanwhile, Delta Air Lines (NYSE: DAL) shares climbed over 6% after reporting record operating revenue and raising its annual guidance. CEO Ed Bastian told the Financial Times that the airline has faced no major impact from the government shutdown, and expects strong travel demand to continue through year-end.
Gold Retreats Slightly After Record Run
Gold prices slipped modestly as news of a ceasefire between Israel and Hamas reduced safe-haven demand, though prices remained near record highs.
Spot gold eased 0.2% to $4,035.49 an ounce, while December futures dipped 0.4% to $4,055.50/oz.
Despite the pullback, gold remains supported by economic uncertainty, Japanese fiscal concerns, and the ongoing U.S. government shutdown. Analysts said the Fed’s dovish tone in its minutes helped keep demand for the metal intact.
Oil Prices Steady After Gaza Ceasefire Announcement
Oil prices were largely steady after U.S. President Donald Trump announced the first phase of a Gaza ceasefire deal between Israel and Hamas, which included a temporary halt in fighting and a hostage-prisoner exchange.
At 09:44 ET, Brent crude futures (December) rose 0.1% to $66.28 per barrel, while West Texas Intermediate (WTI) traded flat at $62.56.
Modest OPEC+ supply restraint earlier in the week provided some price support, but rising U.S. crude inventories and easing geopolitical risks limited gains.
Trump’s 20-point Gaza peace plan, announced last month, has raised hopes of a lasting de-escalation in the Middle East, potentially lowering oil’s geopolitical risk premium.
