Third-quarter GDP beat expectations at 3.4%, while inflation stayed at 3.6%, and traders now see an 80% chance of a Fed rate hike in December. The article covers the market's shift to risk-off sentiment and the biggest earnings movers of the morning, including Alphabet and ServiceNow.
Summary written by Upside AI from the original article. Read the source for full details.
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Keywords
NasdaqinflationFedinterest ratesGDP growth
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Related tickers and likely impact
QQQ
▼ Likely negativeInvesco QQQ Trust
Relevance: high
| Market | US stocks |
|---|---|
| Sector | ETF |
| Close on 10/28/2026 | 725.61 |
| Change that session | +0.60% |
SPY
▼ Likely negativeSPDR S&P 500 ETF
Relevance: high
| Market | US stocks |
|---|---|
| Sector | ETF |
| Close on 10/28/2026 | 772.31 |
| Change that session | +0.34% |
GOOGL
▼ Likely negativeAlphabet Inc. (Class A)
Relevance: high
| Market | US stocks |
|---|---|
| Sector | Communication Services |
| Industry | Interactive Media & Services |
| Market cap | $4.0T |
| Close on 10/28/2026 | 324.89 |
| Change that session | +1.34% |
DXY
▲ Likely positiveRelevance: medium
| Market | Currencies |
|---|---|
| Close on 10/28/2026 | 102.14 |
| Change that session | -0.22% |
XAU/USD
▼ Likely negativeRelevance: medium
| Market | Gold |
|---|---|
| Close on 10/28/2026 | 4,067.54 |
| Change that session | +0.18% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
Related news
- US GDP Unexpectedly Beats Forecasts, Inflation Gauge Stays Elevated, Probability of Fed Rate Hike Rises to 84.6%
US GDP grew 3.4% in Q3 2026, above the 3.1% forecast and up from 2.2% in Q2. According to Fwdbonds chief economist Chris Rupkey, the growth was driven by AI infrastructure investment and sustained consumer and government spending. PCE rose 0.5% in September, lifting annual inflation to 3.6%, while core PCE rose 3.1% year over year, keeping pressure on the Fed. The Fed held its benchmark rate at 3.75%–4% one day before these data were released, and initial jobless claims fell to 194,000. According to CME Group's FedWatch tool, markets put the probability of a Fed rate hike at the December meeting at about 84.6%.
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The Commerce Department reported that U.S. GDP grew at a seasonally adjusted annualized pace of 3.4% in the third quarter, above the 3.1% estimate and well up from 2.2% in the second quarter. Consumer spending rose 0.5%, slightly below the forecast of 0.6%, while personal income increased 0.2% against a forecast of 0.3%. The same day, the personal consumption expenditures (PCE) price index rose 0.5% in September from the prior month, lifting annual inflation to 3.6%; the monthly rate matched the Dow Jones consensus, while the annual rate was 0.1 percentage point below consensus. Core PCE, which excludes food and energy, rose 0.3% monthly and 3.1% annually, in line with consensus. A day earlier, the Fed held its benchmark rate in a 3.75%-4% range, and Chairman Kevin Warsh said officials want to assess incoming data before deciding their next move.
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The Fed kept its benchmark rate at 3.75-4% after its October 28 meeting, saying inflation remains elevated and more data is needed to return it to the 2% goal. The decision was not unanimous: Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented, preferring a 0.25 percentage point increase. Inflation has been above the Fed's 2% target for more than five years, and the PCE index is forecast to exceed 3% in September even excluding food and energy. The U.S. economy remains resilient, with low unemployment, steady consumer spending and AI investment supporting growth; the Atlanta Fed's GDPNow forecasts third-quarter GDP growth of 3.4% annualized. Observers are watching the November 3 midterm elections, while futures markets lean toward a rate hike in December.
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