Fed Holds Rates, Stocks Edge Up Amid Inflation Concerns

Wall Street rose on Wednesday, October 28, after the Federal Reserve decided to keep rates steady despite a split vote. By William Collins, consultant in stock markets – Eurasia Business News, October 28, 2026, Article no 3231, while traders welcomed the pause, two officials pushed for another hike, signaling persistent inflation worries. The Dow Jones Industrial Average rose 0.19% to 52,478.91, the S&P 500 gained 0.28% to 7,744.27, and the Nasdaq Composite advanced 0.27% to 26,549.85. These figures reflect a market snapshot, not official closing numbers.

The Fed held its benchmark rate at 3.75%–4.00%, a 10–2 decision. Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented. This pause maintains flexibility ahead of December, rather than signaling an end to rate increases. The split vote highlighted immediate concerns about inflation, with Cook and Hammack’s dissent making the pause less reassuring than a unanimous decision might have been.

Fed Leaves December Hike on the Table

The central bank emphasized the need for more data to guide policy, keeping a December increase possible. Officials noted that consumer spending and AI investment are supporting the economy but also complicating inflation control. Expensive energy and construction tied to AI could add further price pressures. The restrained gains in stocks reflected a balance between relief over unchanged rates and uncertainty about future policy moves.

The split vote mattered because the disagreement centered on whether tightening should happen immediately, not whether inflation remained a problem. This nuance added to market caution, as investors weighed the implications of ongoing inflationary pressures against the Fed’s cautious stance.

Fewer Rate Decisions Scheduled for 2027–2028

Fed Chair Warsh announced that the Fed will make rate decisions at seven of its eight 2027 meetings, reserving one for broader policy discussions. In 2028, this drops to six rate-setting sessions. This change aims to focus on long-term trends but raises questions about responsiveness to rapid economic shifts. Treasury yields reflected mixed investor sentiment, with the 10-year yield moving toward 5.04% and two-year yields declining during Warsh’s press conference.

Microsoft’s Cloud Growth Drives Gains

Microsoft reported strong fiscal first-quarter results, with revenue of $92.28 billion, up 19% year over year, or 17% in constant currencies. Cloud revenue reached $63.9 billion, surpassing the consensus estimate of $61.62 billion, while Azure grew 48%, exceeding expectations of 44.8%. Adjusted earnings were $4.89 per share, with operating income of $45.92 billion, topping the $43.92 billion estimate. Microsoft gained approximately 4.2% in extended trading following the report.

Oil advanced as renewed Middle East supply concerns outweighed the earlier diplomatic optimism. Brent crude gained $1.44 to settle at $115.32 per barrel, while WTI rose $2.88 to $102.78. The screenshot’s crude quotation of $101.93 was a separate market reading, not the reported WTI settlement. Kitco reported spot gold at $4,035.48 per troy ounce shortly after the Fed announcement, down 0.60%. Earlier Reuters reporting carried by Kitco placed silver at $54.09, down 0.5%, at 12:49 GMT. The gold and silver readings are not simultaneous.