Mahmut Cil and Emir Yildirim
30 October 2025•Update: 30 October 2025
ISTANBUL
Global markets turned green but remained mixed after the Fed cut its policy rate by 25 basis points, in line with estimates, while investors awaited the European Central Bank (ECB) rate decision on Thursday.
The Fed lowered its interest rate to a range of 3.75 to 4% on Wednesday, citing increasing economic activity, slowing employment growth, and rising inflation amid high uncertainty over the economic outlook.
The central bank said it will end balance sheet reduction as of Dec. 1, a move that is expected to impact markets, especially bonds, in the coming period. The Fed’s expansionary policies in 2020–21 provided liquidity to the financial system via large-scale bond purchases but that also contributed to increased inflation.
The Fed is now ending its balance sheet reduction scheme to respond to the recent liquidity crunch in the banking system and rising stress in the repo market. Analysts say this decision could ease liquidity pressure in the US financial system and support estimates of a softening influence on the dollar.
Fed Chair Jerome Powell noted that a rate cut at the December meeting is not certain due to ongoing economic uncertainty, adding that activity will remain under pressure as long as the federal government shutdown continues.
US President Donald Trump and Chinese President Xi Jinping met in South Korea for bilateral talks, marking their first face-to-face meeting since Trump’s return to power in January. Xi said the US and China should be partners and that China’s development poses no threat to the US’ “Make America Great Again” vision.
Xi noted he is ready to work with Trump to ensure smooth US–China relations and to promote the development of the two countries.
Trump said the two leaders reached agreements on several topics and announced plans to reduce fentanyl-related tariffs on Beijing, noting he will visit China in April.
On the corporate side, Nvidia’s market value reached $5.03 trillion as shares climbed 3% on Wednesday after the company announced $500 billion in new orders for its Blackwell and Rubin AI chips and new partnerships.
Following these developments, the Nasdaq closed at a record high with a 0.55% rise, while the S&P 500 followed a flat course, and the Dow Jones lost 0.16%. American futures opened slightly lower on Thursday.
Gold fell 0.55% on Wednesday following Powell’s rate cut comments, but rose 0.8% to $3,961 per ounce on Thursday.
The US 10-Year Treasury yield rose above 4%, hovering around 4.07% on Thursday, while the US Dollar Index fell 0.2% to 99 and the Brent crude oil declined 0.2% to $64.1 per barrel amid higher oil supply estimates.
As for Europe, the stock markets on the continent were mixed on Wednesday, while all eyes turned to the ECB’s rate decision.
Experts believe the ECB will keep its three key rates unchanged at Thursday’s meeting.
On Thursday, Germany and the eurozone will release economic growth figures, and Germany in particular will post its preliminary consumer inflation data for October.
On Wednesday, the FTSE 100 increased 0.61% and the FTSE MIB 30 rose 0.26%, while the DAX 40 fell 0.64% and the CAC 40 declined 0.19%. European futures started Thursday on a decline.
